Fixing the gaps

Even before the row over the controversial IT (Intermediaries) rules 2021 has settled, the Ministry of Consumer Affairs, Food and Public Distribution has come out with a somewhat similar proposal to regulate certain aspects of e-commerce markets by introducing changes in Consumer Protection (E-Commerce) Rules, 2020. The proposal mandates the registration of e-commerce companies like Amazon and Flipkart with the Department of Promotion for Industry and Internal Trade (DPIIT). The e-commerce companies will also be required to share information sought by the government agency within a stipulated time — 72 hours to be precise. The information may be sought in relation to investigations in cybersecurity matters. This effectively means greater control of the government over the e-commerce companies most of which are global players. Earlier in 2018, the entities related to a particular marketplace were banned from selling their goods on their own platforms. Even the inventories of vendors controlled by the marketplaces were also restricted. Now, in the draft proposal in question, the government has sought that the information collected by a particular marketplace cannot be used for the sale of goods of brands related to the e-commerce marketplace entities. Such checks are necessary to prevent the markets from monopolistic behaviour. While the need to regulate the loosely-regulated zone has been felt and articulated over time, the extent of the government's regulation is also something to be watched carefully. There has to be a clearly defined legal balance — without any grey areas. Rather than looking for a need to have government control over e-commerce, we need to have a system in place where the law will have effective control, leaving the least for the government which, of course, will be the facilitator. Further, the government's appetite for information must also be very clearly laid out. The proposals further demand deployment of the Compliance Officers and Grievance Officers on the lines of social media intermediaries. We are already witnessing the government-Twitter row over the matter. Further, the issue of deep discounting and the creation of monopolistic market systems has been raised for a long time and awaits due regulation. The government's straightaway ban of flash sales is indicative of the intent to cure the malaise of deep discounting. But, again flash sales are part of promotional activities allowed under the rule of law and not all of those can be regarded as manipulative. The government has clarified that it is not going to ban conventional flash sales and the proposal is meant for specific flash sales. Between the "conventional" and the "specific" there lies a vast grey area that could serve as a mushrooming ground for controversies and manipulative actions. The minutes of the provisions will of course be laid out in future but abrupt and vague messages right from the beginning will create confusion and hamper the much-needed public discourse over the matter. The discord has already started to set in with some supporting the proposals while others raising their concerns against it. Confederation of All India Traders perceives the draft proposals as "a guiding stone to purify the e-commerce landscape". On the other hand, there are others who are still grappling with the idea of how the ban of flash sales will benefit consumers. This healthy debate has to be well-informed and headed towards a particular direction. The first thing that the government needs is vertical and horizontal positive communication around the proposed provisions. It has let the dais open by inviting the proposals of various stakeholders by July 6. It is expected that the government will take all the suggestions — for and against — seriously and follow the lengthy but assuring path of policy formation rather than going for a hushed approach. Be it the latest IT rules to the lingering farm laws we have had enough of chaos and conflict, and reason can roughly be attributed to lack of proper deliberation. Another such conflict is the last thing we should expect at this juncture. It will be interesting to watch what proposals the stakeholders come up with on July 6. The government has long been trying to regulate this zone and not without reasons. But, since the draft proposals have far-reaching consequences there is a need for rigorous public discourse around the matter and taking in the concerns of all the stakeholders. Let the friction come in the form of deliberations to ensure smooth implementation of the legislation when it comes.