Modi government proposes draft rules for self-regulation of e-commerce platforms
What's the story
In a bid to promote self-regulation among e-commerce platforms, the Indian government has proposed a set of draft guidelines. The move is intended to protect consumers from possible frauds in the fast-growing digital shopping industry. Called 'E-commerce-Principles and Guidelines for Self Governance,' the rules were prepared by the Bureau of Indian Standards (BIS) under the guidance of the Food and Consumer Affairs Ministry.
New challenges
Draft rules address new challenges in e-commerce
The draft guidelines recognize the new challenges brought by the rise of e-commerce, especially in terms of consumer protection and trust. "The importance of clear and effective rules and norms for self-governance in e-commerce cannot be further emphasized in this context," the document reads. It details a tri-phase principle framework covering pre-transaction, contract formation, and post-transaction stages for online commerce operations.
KYC mandate
Pre-transaction requirements for e-commerce platforms
The draft rules mandate e-commerce platforms to perform thorough Know Your Customer (KYC) checks on business partners, especially their third-party sellers. They also mandate detailed product listings including the title, seller's contact details, identification number, and supporting media. This is to help buyers assess product utility and features. For imported goods, importer's details along with those of the packer and seller must be prominently displayed on these platforms.
Transaction transparency
Contract formation and post-transaction guidelines
During contract formation, e-commerce platforms should record consumer consent, allow transaction review, and also maintain transparent policies for cancelation, returns, and refunds. Post-transaction guidelines specify clear timelines for refunds, replacements, as well as exchanges with additional provisions for counterfeit products. Platforms should ensure timely delivery notifications whether handled internally or by third-party providers. The draft also prohibits the sale of banned products, and mandates platforms to maintain monitoring mechanisms.
Data security
Guidelines emphasize data protection and neutral operations
The guidelines highlight data protection compliance across the e-commerce value chain. They also require e-commerce entities to ensure neutrality in operations, providing a level playing field to all stakeholders. The framework prohibits preferential treatment to any sellers or service providers.