Centre proposes changes to e-commerce rules, bans flash sales

Among the changes proposed, certain kinds of flash sales have been banned and provision has been made for punitive action against the platform if sellers don't comply, a statement issued by the Centre said.

The proposed amendments to the rules have been made to bring transparency, strengthen the regulatory regime, protect consumers' interests, and encourage free and fair competition, the statement said.

The Centre has sought views and suggestions on these amendments to the Consumer Protection (E-commerce) Rules, 2020, within 15 days.

"Certain e-commerce entities are engaging in limiting consumer choice...wherein one seller selling on platform does not carry any inventory or order fulfillment capability but merely places a 'flash or back-to-back' order with another seller controlled by platform," the statement said.

"This prevents a level playing field and ultimately limits customer choice and increases prices," it added.

The government also clarified that conventional flash sales by third party sellers are not banned on the e-commerce platform.

In another amendment, the government necessiated the appointment of Chief Compliance Officers, nodal contact persons for 24x7 coordination with law enforcement agencies, to ensure compliance of the Consumer Protection Act, 2019.

This would, according to the statement, strengthen the grievance redressal mechanism.

Additionally, a framework for registration of every e-commerce entity has been proposed. The allotted registration number shall be displayed prominently on the website as well as the invoice of every order, it says.

This "would help create a database of genuine entities and ensure that consumers are able to verify its genuineness before transacting".

"Mis-selling has been prohibited. That is, selling goods and services...by deliberate misrepresentation of information..." the statement added.