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Major changes to e-commerce norms
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SME Times News Bureau | 22 Jul, 2021
In major changes to e-commerce rules, the Ministry of Consumer Affairs
has specified that an e-commerce marketplace entity shall not sell any
goods owned or controlled by it on such e-commerce marketplace platform.
All the sellers on the platform shall only be third party sellers, and
no e-commerce store can be run on the e-commerce marketplace platform.
These changes come in the Consumer Protection (E-Commerce) Rules, 2020 and the government has sought comments on it.
The
changes in rules to be notified will cut on complaints of discounts,
and sales by related parties by foreign e-commerce majors.
An
e-commerce marketplace entity means an e-commerce entity, which provides
an information technology platform on a digital or electronic network
to facilitate transactions between buyers and sellers.
In
addition, the changes in rules now prescribe that no e-commerce entity
shall discriminate between consumers of the same class or make any
arbitrary classification of consumers affecting their rights under the
Act. No e-commerce entity shall make any segmented offers to particular
consumers on an arbitrary basis. The classification of consumers shall
be on a transparent and objective basis and offerings shall be uniform
across a class of consumers.
An entity will not use information
collected by marketplace e-commerce entities, for sale of goods,
directly or indirectly, by any seller, whether related or not.
The
e-commerce marketplace entity or its associated enterprises or its
related parties cannot directly or indirectly license its brand or
private label products to third parties to be sold on the platform.
If
an e-commerce entity is operating an e-commerce marketplace platform as
well as an e-commerce store platform, the two platforms cannot use the
same or similar brand name or branding.
The entity will give
total price in single figure of any good or service, along with the
breakup showing all the compulsory and voluntary charges such as
delivery charges, postage and handling charges, conveyance charges and
the applicable tax, as applicable. This shall also be made available
transparently in a tabular form when a consumer is comparing various
products.
Every marketplace e-commerce entity shall publish on
its website the charges payable by sellers for selling their goods on
the platform and any other services provided by the e-commerce
marketplace entity. All information, including its terms and conditions
generally governing its relationship with sellers, shall be displayed on
its platform.
Categorisation, if any, of sellers shall be on a
transparent basis. All offers or discounts or relaxations in terms and
conditions to various categories of sellers shall be uniform for all the
sellers in a given category. Such categorisation as well as provision
of discounts or offers should not be arbitrary to the advantage of
select sellers.
Every e-commerce marketplace entity shall
provide API based access to all logistics service providers in a
non-discriminatory manner. Sellers should be free to choose the
logistics service providers. No logistics service provider of a
marketplace e-commerce entity shall provide differentiated treatment
between sellers of the same category.
The delivery charges
charged by the logistics service provider shall be transparently
published. Any discount or relaxation in terms and conditions which are
given to certain categories of sellers should be uniformly applicable to
clearly defined categories of sellers and should not be arbitrary. Such
terms for discounts and relaxation in charges shall also be published.
If
related party or associated enterprise is providing logistics services,
any discrimination, waiver or under-charging of delivery charges shall
be treated as discount to the selling price provided by the platform
which is not permissible.
Two enterprises shall be deemed to be
associated enterprises, if they are covered by the definition of
associated enterprise in section 92A of Income Tax Act.
Also, if
they are affiliates; where 'affiliate' means, with respect to any
person, any other person who, directly or indirectly controls, is
controlled by or is under common control with such person, where one
enterprise provides loans or guarantees to the other enterprise; where
one enterprise holds direct or indirect economic participation through
equity or otherwise.
No marketplace e-commerce entity shall sell
goods or services, directly or indirectly, to any person who is
registered as seller on its platform.
No marketplace e-commerce
entity or logistics service provider shall make any offers to a consumer
or a class of consumer that is not uniformly applicable across all the
sellers on the platform.
If a marketplace e-commerce entity is
offering any discounts or incentives to consumers or sellers to promote
itself, it must give such discounts on a non-discriminatory basis across
all consumers or sellers, as the case may be.
To ensure
transparency and prevent cross-subsidisation, no marketplace e-commerce
entity shall be allowed to collect bundled fees from consumers for (i)
the services provided with respect to the ecommerce platform and (ii)
any other service that is not related to ecommerce platform provided by
the e-commerce entity or its related parties or associate enterprise.
E-commerce
marketplace entity shall enable all payment options as authorised by
Reserve Bank of India, and provide API for easy integration with all the
payment platforms on a non-discriminatory basis. Sellers shall be able
to select the preferred payment service provider.
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