Are you a digital platform? If yes, this checklist is for you.
There is a popular misconception that platforms have very light legislation governing them. However, this is not true. The Information Technology Act, 2000 and the Consumer Protection Act, 2019 are crucial legislations which govern the platforms.
This checklist focusses on the Consumer Protection Act, 2019 and a key rule under there, the Consumer Protection (E-Commerce) Rules, 2020.
It is important not to get distracted by the safe harbours which only means that the platform is not liable in the I.T. Act, 2000 – however, these 2020 Rules are imposed by a different law. So, the “we are an intermediary” defence does not help platforms here.
Like we have earlier said this checklist is from a perspective of consumer laws. There are other sectoral regulations which may be applicable in parallel, for example, food regulations by FSSAI. We will cover these in the upcoming playbook.
For any discussions, please e-mail srishti.ojha@veristlaw.com or umang.arya@veristlaw.com. And remember this is not formal legal advice!
Key Terms:
“Marketplace e-commerce entity” – an e-commerce entity which provides an information technology platform on a digital or electronic network to facilitate transactions between buyers and sellers;
“e-commerce entity” – any person who owns, operates or manages digital or electronic facility or platform for electronic commerce, but does not include a seller offering his goods or services for sale on a marketplace e-commerce entity;
“Seller” – a “product seller” in s. 2(37) of the Consumer Protection Act, 2019 and includes service providers.
Let’s play:
Liabilities of marketplace e-commerce entities
Ensure through an undertaking from the seller that the descriptions, images and other content pertaining to goods & services on the platform are accurate and correspond directly with the appearance, nature, quality and general features of such goods and services.
Include in the terms and conditions generally governing your relationship with sellers on the platform, a description of any differentiated treatment which you give or might give between goods or services or sellers of the same category.
Take reasonable efforts to maintain a record of relevant information allowing for the identification of all sellers who have repeatedly offered goods or services that have previously been removed or access to which has previously been disabled under the Copyright Act, 1957 (14 of 1957), the Trade Marks Act, 1999 (47 of 1999) or the I.T. Act, 2000 (21 of 2000):
However, it is not mandatory for you to terminate the access of such seller to the platform. You may do so on voluntary basis.
Display following information on the platform in clear and accessible manner –
Seller details –
Names of their business
Whether registered or not
Any rating or other aggregated feedback about such seller
Any other information enabling consumers to make informed decision at pre-purchase stage
Post-purchase of a good/service, if the consumer requests for it in writing, all details about the seller from whom purchase has been made, including principal geographic address of HQ and all branches, name and details of its website, its email address and any other information necessary for communication with the seller for effective dispute resolution.
Ticket number for the complaint lodged by the consumer to enable tracking the status of complaint.
Information relating to refund, return, exchange, warranty and guarantee, delivery and shipment, modes of payment, and grievance redressal mechanism, and any other similar information which may be required by consumers to make informed decisions;
information on available payment methods, the security of those payment methods, any fees or charges payable by users, the procedure to cancel regular payments under those methods, charge-back options, if any, and the contact information of the relevant payment service provider;
all information provided to you by sellers under sub-rule (5) of rule 6 of 2020 Rules; (To know more about the information which sellers need to give to the platform, please check out our playbook on E-Commerce Sellers. You can message any of us at srishti.ojha@veristlaw.com or umang.arya@veristlaw.com for this.)
an explanation of the main parameters which, individually or collectively, are most significant in determining the ranking of goods or sellers on the platform and the relative importance of those main parameters through an easily and publicly available description drafted in plain and intelligible language.
If you want to avail safe harbour exemption under S. 79(1) of the I.T. Act, 2000, you have to comply with ss. 79(2) & 79(3) and the provisions of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules, 2021.
Duties of E-commerce entities
If you are marketplace entity, you are automatically an e-commerce entity. Therefore, you should fulfil below mentioned duties too –
Incorporation under Companies Act, 1956 or Companies Act 2013, whichever is applicable.
Appointment of nodal person of contact or an alternate senior designated functionary who is resident in India – to ensure compliance with Consumer Protection Act, 2019 and rules made thereunder.
Provide following information in clear and concise manner –
legal name of the e-commerce entity;
principal geographic address of its headquarters and all branches;
name and details of its website; and
contact details like e-mail address, fax, landline and mobile numbers of customer care as well as of grievance officer
No involvement in any unfair trade practice, whether in the course of business on its platform or otherwise.
Grievance redressal mechanism.
Appoint a Consumer Grievance Redressal Officer
Display the name, contact details and designation of such officer on platform
Ensure that the grievance officer acknowledges the receipt of any consumer complaint within 48 hours and redress the complaint within 1 month from the date of receipt of the complaint.
If the goods or services being sold on the platform are imported, mention the name and details of the importer or seller of such goods and services.
Endeavour on best effort basis to become partner in the convergence process of the National Consumer Helpline of the Central Government.
Should not impose cancellation charge from the consumers who are cancelling after confirming purchase, unless similar charges are also borne by the e-commerce entity, if it cancels the purchase order unilaterally for any reason.
The consent of the consumer to purchase any goods or services on the platform has to be recorded in an explicit and affirmative manner. You should not record consumer’s consent automatically, like pre-ticked checkboxes.
Effect all payments towards accepted refund requests of the consumers as prescribed by the Reserve Bank of India or any other competent authority under any law for the time being in force, within a reasonable period of time, or as prescribed under applicable laws.
You shall not –
(a) manipulate the price of the goods or services offered on its platform in such a manner as to gain unreasonable profit by imposing on consumers any unjustified price having regard to the prevailing market conditions, the essential nature of the good or service, any extraordinary circumstances under which the good or service is offered, and any other relevant consideration in determining whether the price charged is justified;
(b) discriminate between consumers of the same class or make any arbitrary classification of consumers affecting their rights under the Act
This playbook focusses on the compliances by the e-commerce platforms only. However, platforms should also be mindful of the compliances required from the sellers on e-commerce. We have a separate playbook on the compliances required by law from e-commerce sellers. If you wish to check that out, click here.