1. Level playing field

While the proposed amendments to aforementioned rules is clearly a welcome development, similar measures are required in the case of large scale off-line retail, both single brand as well as multi-brand. Most of the large scale corporate players in organized retail operate in both the off-line as well as the online segment and the lines of distinction are getting increasingly blurred. Added to this are the millions of small scale retailers in the unorganized sector. While small scale retailers have hitherto operated only on off-line basis, many of them are now coming online, thanks to the initiatives launched by a large number of aggregators.

In the interests of the consumers and also for the creation of a level playing field, it is important to have measures covering off-line retail and these measures should also account for the increasingly symbiotic relationship between online and offline retail.

2. Restrictive Trade Practices

While the Rules (read with the proposed amendments) lay a lot of emphasis on unfair trade practices and misleading advertisements, the issue of restrictive trade practices has not been dealt with in sufficient detail. While Rule 5 (Duties of E-commerce entities) clearly prohibits manipulation of prices and search results, the fact remains that there are various other forms of restrictive trade practices which need to be addressed through these rules ( in addition to the measures that may be enshrined in the Competition Act).

3. Liability of market place E-commerce entity

The proposed amendment to the Rules ushers in the concept of “fallback liability” which happens in those cases where the seller does not deliver the goods and services due to acts of deliberate negligence, omission or commission. However, this does not cover the other scenarios laid down in the Consumer Protection Act under the headings of “unfair trade practices”, “restrictive trade practices” and “misleading advertisements”.

The marketplace E-commerce entity is supposed to secure the authenticity of the information declared by the sellers through an undertaking. As per the proposed amendments, the Chief Compliance Officer is liable for third-party data, information and communication links but also enjoys safeguards provided due diligence is exercised. Protection is also available under Section 79(1) provided sub-rules (2) & (3) are complied with. However, the following issues need to be addressed in this context:

  1. Separate rules or sub-rules need to be formulated to elucidate the concept of “due diligence”
  2. The liabilities have been defined in terms of the Information Act, 2000 because E-commerce entities are considered to be “intermediaries”. However, the issue of liability of such entities also needs to be examined through the prism of Consumer Protection Act. Currently the Act provides for the following types of entities, namely product manufacturer, product seller and product service provider. It would be worthwhile to bring in an added concept of “ market place E-commerce entity” and define their liabilities under the Act after a holistic assessment of all relevant facts.