Promises and pitfalls

E-commerce, or the buying and selling of goods and services through online platforms, is a rapidly expanding industry.

The Consumer Protection (E-commerce) Rules, 2020, introduced by the Ministry of Consumer Affairs, Food, and Public Distribution in India under the Consumer Protection Act, 2019, were designed to regulate and protect consumers in the e-commerce sector. These rules were intended to complement the Act by regulating various e-commerce activities.

The Rules, 2020, were brought to regulate all goods and services bought and sold over digital or electronic networks, including digital products; all models of e-commerce, including marketplace and inventory models; all e-commerce retail, including multi-channel single-brand retailers and single-brand retailers in single or multiple formats; and all forms of unfair trade practices across all models of e-commerce. However, these rules do not apply to any activity of a natural person carried out in a personal capacity, not being part of any professional or commercial activity undertaken on a regular or systematic basis. Furthermore, these rules also apply to e-commerce entities not established in India but systematically offering goods or services to consumers in India.

The Ministry also released a notification dated May 17, 2021, introducing the Consumer Protection (E-Commerce) (Amendment) Rules, 2021. These amendments require a company outside India or a company having an office, branch, or agency outside India but controlled by a person resident in India to appoint a nodal officer or an alternate senior designated functionary who is an Indian resident to ensure compliance with the provisions of the Act and the Rules.

The concern of authorities for consumers is apparent. Including e-commerce regulations within the Consumer Protection Act itself is a prudent move. However, better implementation of these Rules is needed, especially concerning consumer redressal mechanisms. For instance, the Rules mandate that every e-commerce entity establish an adequate grievance redressal mechanism, appoint a grievance officer, and display the name, contact details, and designation of such an officer on its platform.

The Rules also mandate that every e-commerce entity provide information on its platform about its legal name, principal geographic address of headquarters and branches, name and details of the website, and contact details, including email address, fax, landline, and mobile numbers of customer care and the grievance officer. However, in practice, these contact numbers are often difficult to reach, officials provide stereotyped responses, multiple confusing lines are in operation, and adequate mechanisms are lacking. Additionally, emails often go unanswered, and formality calls are made without offering practical resolutions.

As per the Rules, the grievance officer is required to acknowledge the receipt of any consumer complaint within forty-eight hours and resolve the complaint within one month from the date of receipt. However, many times, complaints do not even reach the appropriate senior management or relevant officials. Therefore, it is suggested to include mandatory provisions for appointing only senior-level, qualified management officials to act as the ultimate grievance redressal officers.

Just as the Factories Act, 1948, outlines specific responsibilities for occupiers, the Consumer Protection Act could incorporate similar and more stringent provisions. It may also be clarified that employees answering calls should be obligated to provide their employee code numbers. Although there are provisions for issuing ticket numbers for complaints, many companies rely solely on artificial intelligence modules despite the Rules, which have inherent limitations. A serious check on such practices is necessary. Additionally, the Rules could be clarified further to avoid misinterpretation or multiple viewpoints.

Apart from requiring details on entities' websites, there could be a centralised website listing all e-commerce platforms with their contact emails, similar to directories from earlier times.

For divinely-abled individuals and senior citizens, separate helplines could be introduced. Special Rules could mandate that a concerned official make a mandatory follow-up call to differently-abled individuals or senior citizens (septuagenarians and above living alone) after every sale to check for any grievances. E-commerce companies, which earn revenue every minute with lower operational costs compared to physical stores, should extend such courtesies.

The drafting of these Rules is commendable, and their intent—to create greater uniformity and transparency for buyers—is clear. With more precise implementation strategies, the objectives of these Rules can be better achieved.

The writer is a practising Advocate in Supreme Court and High Court of Delhi. Views expressed are personal