If the Consumer Protection (E-Commerce) Rules or the E-Commerce Policy are implemented strictly, they may have worrisome implications. Although it is commendable to introduce regulations that prioritise consumer interests, it is important to carefully consider the potential consequences. These proposed developments have the potential to not only affect the industry but also require a revaluation of the fundamental concept of ‘consumer protection’.
Unwavering Commitment to Customer Experience
Over the years, India has undergone a transformation from a need-based market to a consumer-centric market. The preferences of consumers have shifted towards a wider range of goods and services, and they now demand high quality. As a result, e-commerce market players have been compelled to prioritise user experience and feedback. Additionally, the industry has increasingly focused on ensuring privacy and security for consumers.
In the realm of Indian e-commerce, personalised recommendations and customised shopping experiences have gained considerable significance. These platforms utilise advanced technologies and algorithms to analyse consumer preferences and behaviours, enabling them to offer personalised product suggestions. Furthermore, e-commerce has provided consumers with access to a variety of local products produced by small industries and MSMEs, which were previously inaccessible. The introduction of easy returns and refunds has also contributed to enhanced consumer trust and loyalty.
In order to strengthen consumer protection, e-commerce companies have implemented rigorous measures to combat fraudulent activities and safeguard against counterfeit products. They have also taken proactive steps to address customer complaints promptly. Moreover, these companies are actively educating consumers and empowering them to make well-informed decisions.
The Speculative Rules Shaping E-Commerce
According to a market study, Indian e-commerce is projected to reach $160-170 billion by 2026, showing nearly three times the growth of the overall retail market. However, the introduction of stringent regulatory measures has the potential to not only hinder this estimated growth but also undermine the importance and implementation of consumer protection.
Firstly, the government’s concern regarding “deep discounts” and “predatory pricing” is exaggerated. While e-commerce players do offer discounted prices on goods and products, it benefits consumers by providing them with competitive options. While the Parliamentary Standing Committee’s intention to address the potential negative impact of such pricing practices is commendable, restricting discounts and competitive pricing would discourage e-commerce players from innovating consumer-friendly business models.
Secondly, when discussing a possible ban on related services, the government should differentiate between these services and the logistical services provided directly or through partnerships by e-commerce players. In-house logistics contribute to smoother delivery processes and offer a faster and more accountable supply chain. Although the 2021 E-Commerce Rules initially aimed to merge both subjects, the revised rules should carefully consider this matter and make appropriate decisions.
Thirdly, the ongoing debate about questioning the inventory-based model of marketplaces and the potential for a ban does not serve the purpose of enhancing consumer protection. Restricting any form of business model would not benefit consumers but instead, limit their options. Furthermore, the notion that e-commerce is “killing” traditional retail is a fallacy, as online shoppers only account for approximately 13-14 percent of the consumer base in India. It is important to establish substantive reasoning for associating consumer welfare with alienating the inventory-based model, which is merely a business function.
Moreover, concerns regarding the ban on offering special incentives for using specific payment services are unfounded. Such partnerships are essential and serve as significant financial and revenue requirements for sustaining e-commerce players. Questioning the operational aspects of a business model not only demoralises the industry and affects the Ease of Doing Business (EoDB) factor, but also has broader implications for financial inclusion.
The e-commerce sale of Schedule H drugs in India poses consumer protection concerns. Counterfeit or substandard medications available online risk consumer health and safety. Privacy and security fears surround the handling of personal and medical information during online pharmaceutical transactions. Weak regulation in e-commerce hinders informed consumer choices. Stricter measures are necessary, including licensing requirements for authorised sellers, adherence to quality control standards, and ethical practices. Effective surveillance mechanisms are vital to combat the sale of banned items like acid. This includes a comprehensive regulatory framework, a tracking system, strategic surveillance cameras, collaboration between agencies, and advanced technologies for inspections and detection.
Ensuring consumers are at the core of e-commerce
In conclusion, the 2015 OECD Guidelines and the 2017 UNCTAD notes offer comprehensive policy measures that encompass applicable laws, their enforcement, consumer education, fair business practices, and international cooperation. These measures aim to prioritise consumer trust without hindering the potential for Ease of Doing Business. Adopting such balanced approaches will serve as a guiding path for India’s regulatory ecosystem and enhance cross-border cooperation to achieve global harmonisation of consumer protection standards.
Similarly, the Digital India Law and the Data Protection Law should be approached with similar expectations. The Digital India Law should prioritise safety, trust, and accountability in e-commerce operations, while the Data Protection Law should focus on safeguarding personal data, including consumer data accessed by e-commerce players. Both laws should establish norms for user privacy and security without undermining business confidence. It is crucial to finalise these laws in a manner that maintains a favourable environment for business operations.
Fauzia Khan is Member of Parliament, Rajya Sabha. Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect News18’s views.
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