Govt Bans Flash Sales; Imposes Stricter Ecommerce Rules.

The government of India has proposed amendments to the Consumer Protection (E-commerce) Rules, 2020, which considers the banning of mis-spelling and fraudulent flash sales of a wide variety of products and services on e-commerce platforms. In addition, the government also made it mandatory for e-commerce entities to register with DPIIT.

According to amendments, taking account of public outrage, a ban on misleading users by manipulating search results and the appointment of chief compliance officer and resident grievance officer is proposed. The Consumer Protection (E-commerce) Rules 2020 were initially notified in July last year. The violation of the proposed notification is subject to trial and jurisdiction under the Consumer Protection Act, 2019.

E-commerce companies must provide relevant information no later than 72 hours after receiving an order from a government agency to prevent, detect, investigate, and prosecute offenses under any law.

The proposed amendments have been put up on the Ministry of Consumer Affairs website, calling for public comments till July 6.

“Conventional flash sales by third-party sellers are not banned on e-commerce platforms. But certain e-commerce entities are engaging in limiting consumer choice by indulging in ‘back to back’ or ‘flash’ sales wherein one seller on a 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 the platform. This prevents a level playing field and ultimately limits customer choice and increases prices,” the Ministry said.