An e-Commerce operator operating in marketplace or hybrid mode shall manage its relationship with sellers on its platform in an agnostic manner and without being partial to any of its sellers.
This is laid out in the Draft E-commerce policy prepared by Department for Promotion of Industry and Internal Trade under the Ministry of Commerce & Industry.
This National e-Commerce Policy is therein, not a fresh construct of government's ambitions but is a consolidated document for the continued vision of providing a level playing field to all stakeholders, including individual consumers, MSMEs, traders, artisans, start-ups, while pursuing a development agenda which addresses growth and reduces prevalent market distortions. This focus is important as retail trade has been complaining against it.
Meetings are underway to receive feedback on the policy. One on one interactions have been held with concerned Ministries/Departments, basis which the revised version of the policy has been prepared.
What changes are proposed in new policy?
In this policy, e-commerce means the business activities of sale, marketing, distribution of goods or provision of services through the Internet or other information networks. The policy covers all modes of e-commerce; i.e., inventory, marketplace and hybrid model. This Policy is equally applicable to entities, natural and /or legal with foreign and domestic investments.
An e-Commerce operator can operate in any of the three modes of ecommerce. E-Commerce platforms shall ensure that they operate according to the extant and applicable legislation/rules for conduct of all such operations. E-Commerce platforms hosted by or on behalf of entities having foreign investment shall comply with Foreign Direct Investment Policy, which shall prevail in case of inconsistencies between the two policies.
An e-Commerce operator operating in marketplace or hybrid mode shall manage its relationship with sellers on its platform in an agnostic manner and without being partial to any of its sellers.
An e-Commerce operator functioning in market or hybrid mode shall ensure that information collected through platform is not used to obtain market advantage against sellers on its own platform.
Actions and things which cannot be done by the platform entities can also not be done by any of its associates and related parties. Government may, from time to time, notify parties which fall in the definition of associates and related parties.
Owing to the cross-cutting nature of e-Commerce, different laws and regulations across sectors govern the present e-Commerce activities, some of which are; Income Tax Act, 1961, Consumer Protection Act, 2019, Information Technology Act, 2000, Foreign Exchange Management Act, 2000, Competition Act, 2002, Payment And Settlement Systems Act 2007, Companies Act, 2013 and laws related to Goods and Services Tax etc.
The rapid evolution of the sector has brought to the forefront some major concerns regarding (i) maintaining a level playing field, (ii) influence of monopolistic tendencies and therein (iii) a need to maintain symmetric information to exert free choice (iv) loss of business for the small retail trader segment.
What changes for market dominant players
By the nature of e-Commerce activity, there is a tendency for one or two strong companies to emerge as leaders and exercise control over the repository of data collected.
The policy notes that an entity that has access to maximum information about the market, is in a position to dominate it. This leads to subversion of competition. The greater benefits of eCommerce can be reaped only when the field remains competitive and barriers to new entrants are minimized. To ensure that the speed of action is not adversely impacted as a result of fragmented legal domain, Government may create a mechanism to holistically inquire into the violation of various laws and initiate action in accordance with such laws.
On handling of data, Government acknowledges the importance of data as an asset and need to use data emanating from India for Indian entities first. Government is in the process of developing regulations for personal and non-personal data. Sharing of data for industrial development shall be encouraged and regulations for data will provide for sharing mechanism.
Government shall lay down principles for usage of data for the purpose of development of any industry, e-Commerce, consumer protection, national security, economic security and law enforcement including taxation where such principles do not already exist and put in place adequate safeguards to prevent misuse and access of data by unauthorized persons.
Government may require adequate safeguards to be put in place to prevent misuse of data and access of data by unauthorized persons. Such safeguards may include regulating cross-border flow of data pertaining to Indians and transactions taking place in India and requirement of adequacy audits to be carried out by Indian firms. Violation of safeguards shall be viewed seriously and attract heavy penalties.
No bias
For a free and informed choice, e-Commerce operators shall ensure that algorithms used, are not biased and that no discrimination due to digitally induced biases is prevalent.
Payments made through token/gift/voucher systems, on any e-commerce platform must go through regulated channels as authorised by RBI.
E-Commerce platforms must ensure that goods and services delivered to the consumers match the description given on the platform and quality product and services are provided to them. Provisions included in the Consumer Protection (e-Commerce) Rules, 2020, should be adhered by all e-commerce entities.
Consumers have a right to be made aware of all relevant details about the goods and services offered for sale including country of origin, value addition in India, and any other such information which may be necessary for making an informed decision at the pre- purchase stage.
For fair competition, e-Commerce operators must ensure equal treatment of all sellers/vendors registered on their platforms and not adopt algorithms which result in prioritizing select vendors/sellers.
Transparency is crucial
E-commerce operators must ensure to bring out clear and transparent policies on discounts, including inter alia the basis of discount rates funded by platforms for different products/suppliers and implications of participation/non-participation in discount schemes, so as to ensure fair and equal treatment.
In the interest of the Indian consumer, and the local startup ecosystem, the government will aim to ensure that there are more service providers available, and that network effects do not lead to creation of digital monopolies misusing their dominant market position.
On anti-counterfeit measures, the policy lays down that government aims at eliminating counterfeit products from e-Commerce platforms. E-Commerce platforms shall create adequate safeguards to ensure that products offered by sellers are genuine and that sellers are traceable. For products fulfilled end-to-end by the e-commerce entity, the liability for counterfeit product shall be jointly and severally of the e-commerce entity and the seller.
The policy notes that India has a large and vibrant retail sector. Studies indicate that if India can target around 250,000 MSMEs moving into Cross Border Trade (CBT) space in the next four years, it can successfully list at least a 100,000 MSMEs with five million products and can increase four times the existing CBT revenue in B2C category.
Streamlining regulatory processes
The Government will work towards streamlining of regulatory processes to ease the burden of compliance for activities related to e-commerce.
The Government shall endeavor to bring online, sellers which are currently offline. Support shall be given for aiding computerization, digital payment enablement and on-boarding of those sellers that currently do not have such facilities. Training and hand-holding shall be undertaken through targeted programs, in coordination with e-commerce platforms.
Back-end channel integration and hyper-local models, are important ways in which growth of the sector can be inclusive and will be encouraged, so as to integrate advantages of the offline retail trade with those of online sale.
State governments will be encouraged to transform their State Emporiums into e-Emporiums in order to significantly increase the reach of products of rural craftsmen and weavers to a much larger market, backed by the trust that government brings into a marketplace. A long run endeavor would be to convert GeM into a marketplace where ordinary consumers could procure, increasing the efficiency in the Indian economy.
To enhance exports, India Post will develop a specialized, low cost, and trackable solution targeted at e-commerce exporters for small products, with committed timelines for express delivery. Further, Foreign Post Offices will be strengthened and their numbers will be increased, so that they may act as delivery hubs, across regions.
The digital integration of multiple interfaces such as Central Board of Indirect Taxes & Customs (CBIC), Department of Posts (DoP), Directorate General of Foreign Trade (DGFT) and Goods and Service Tax Network (GSTN) for facilitating e-commerce exports shall be undertaken. 3.7. The policy shall bring e-commerce exports on par with non-e-commerce exports by enabling online grant of drawbacks, advance authorization, EPCG and GST refund etc.
No place for counterfiets
On anti-piracy, intermediaries shall put in place measures to prevent online dissemination of pirated content. The identification of trusted entity and anti-piracy measures shall be done on a voluntary basis.
Upon being notified by the owner of copyright protected content/ work that an e-commerce platform is making available, selling or distributing the copyrighted content/ work, without the prior permission/ authorization of the owner, such platform should expeditiously remove or disable access to the alleged content.
In order to ensure that e-Commerce is not used to defraud customers, registration with an authority identified by Government shall be mandatory.
Government shall collect information from e-Commerce platforms to aid it in making necessary decisions.
In order to keep up with the technological and economic transformations in the e-commerce sector, measurement of e-commerce activities, including but not limited to details of sale, import and customs duties, grievance redressal, compliance to existing or new regulations/rules, rogue sellers, counterfeit items etc. will be undertaken by concerned agencies in a periodic manner.
Given the inter-disciplinary nature of e-commerce, the Standing Group of Secretaries on e- commerce (SGoS) shall give recommendations to address policy challenges. The SGoS is an important avenue of ensuring that the policy keeps pace with the digital environment. It will continue to be important in administering the e-commerce policy.
(With inputs from IANS)
