Draft ecommerce rules require massive course correction: Legal expert

New Delhi: The government needs to hold wider consultation before framing ecommerce rules as in the present format it is encroaching in the domain of various other legal frameworks and establishments, a senior legal expert said on Friday.

The draft e-commerce rules released by the government on June 21, proposed to ban fraudulent flash sale and mis-selling of goods and services on e-commerce platforms.

It mandates appointment of chief compliance officer/grievance redressal officer are among other key amendments proposed to the Consumer Protection (Ecommerce) Rules, 2020.

“The proposed amendments go beyond the ambit and scope of the Consumer Protection Act and indirectly regulate e-commerce entities by imposing additional obligations. If implemented, this can have an obstructive impact on the economic development of the country with respect to job opportunities, scope for the growth of MSMEs, global investments, and consumer experience,” Gopal Jain, Senior Advocate, Supreme Court of India, told reporters.

He said that the proposed norms are an indirect attempt to regulate the online space by clubbing multiple issues relating to the act which aims to assess and investigate adverse impact on consumers.

“There is a need for wider consultation before the government frames e-commerce rules,” Jain said.

He said holding e-commerce companies responsible for goods sold by some other sellers and proposed restrictions on sale of goods by related parties on the platform will hurt the business of MSMEs.

“The rules impose fall-back liability strikes at the root of the e-commerce marketplace making them liable for fraud committed by a seller when the platforms are merely responsible for transmitting information provided by the seller,” Jain said.

He said that the draft rules are contrary to principles of proportionality which requires a balanced and graded approach.