‘Define unfair trade practice for e-com’

Saying that predatory pricing by e-commerce firms could be out of competition and harmful to consumers in the long run, a parliamentary panel recommended that the government be more clear on what constitutes ‘business behavior’ The definition must offer a practical legal remedy to deal with the issue.

The committee headed by Member of Parliament Pratap Singh Bajwa, in its report on ‘The Consumer Protection (E-Commerce) Rules, 2020’ tabled in Parliament on Wednesday, also recommended imposing a cap on the delivery charge levied by e-commerce firms. . , As well as providing punitive provisions for violations of rules relating to misinformation.

The committee said that while e-commerce enterprises offer many benefits, the development of the clause has made consumers vulnerable to issues of new forms of unfair trade practices, privacy violations and unavailable complaints.

“Predatory pricing, as a short-term strategy, may be the reason for some market giants to eliminate competition from the market in order to maintain short-term losses and reduce the prices of their products below average variable costs. Harmful to consumers in the long run, ”the committee said.

However, it also stated that from a legal point of view, it was very difficult to substantiate allegations of predatory pricing, as it would be very difficult to prove the impact of such practice on market competition. “The committee, therefore, recommends that there should be a more clear definition of the Unfair Trade Practice and Practical Legal Measures to deal with such circumcision practices by e-commerce entities, especially multinationals and grocery small vendors.”

The panel has also suggested that the Ministry of Consumer Affairs, Food and Public Distribution should issue comprehensive guidelines for determining the cap on delivery charge ceiling in peak hours of service as well as delivery charge levied by market entities. “The Ministry must clearly differentiate the rules in cases of misinformation, any information and information that is otherwise correct but produces an erroneous effect, and the rules itself provide punitive provisions for each case.” Said this

The ministry should also clearly define ‘drip pricing’ – wherein the final cost of the product rises due to additional charges, and there is a provision to protect consumers against it by including penal provisions for violations.

To protect users ‘privacy and protect their data, the panel recommends that users’ personal data be classified according to their level of sensitivity and, assigned appropriate security for each level. “The committee further recommended that the ministry should ensure that a secure and robust system of payment gateways is made available to consumers so that users’ transaction data is not compromised in any way.”

It has also been suggested that all major e-marketplace entities should set up their own data center in India, so that consumer data is not hosted in a server outside the country’s borders, “which can be misused by the enemy country”.

The committee said that many multinationals as well as offshore based companies were involved in e-commerce, the committee said that some regulatory mechanism needed to be devised so that local vendors / grocery stores were not eliminated from the market. “The committee, therefore, recommends that adequate security should be given to such small / local vendors within the regulations and the ministry should devise ways that such small retailers can also become part of e-commerce.”

In addition, amid growing cases of fake reviews and unfair partisanship in the display of goods, the committee said that it was concerned about legal provisions to curb deceptive tactics used by traders to gain a competitive advantage for others. Does not agree with the explanation. Therefore, the committee recommended that some corrective mechanisms should be created to discourage misleading tactics including manipulation of algorithms, fake product reviews and ratings so as not to harm consumer interest in any way. “

The committee also recommended that the duties and responsibilities of customer service provided by the marketplace institution should be clearly stated in the regulations. The ministry also directed that there should be a mechanism to provide a dedicated customer service number to e-commerce institutions as well as monitoring the time taken by customer care officers to solve a problem, it said.