[Editorial Analysis] For Consumers, a bad bargain

Mains Paper 2: Governance
Prelims level: Consumer Protection (E-Commerce) Rules 2020
Mains level: Issues related to Public Policies

Context:

• Recently proposed Consumer Protection (E-Commerce) Rules 2020 have been drafted ostensibly in the name of the consumer. But the consumer welfare seems to be an afterthought.

• The rules are driven more by the desire to shield the traditional brick and motor stores and handicap e-commerce firms.

Looking Deep into the Rules:

• Under the fall-back liability clause, e-commerce entities will be liable in case suppliers on the platform fail to deliver the goods to the consumer, causing them a loss.

• However, the FDI in e-commerce firms is permitted only in the marketplace model, which leads to little control over the inventory by the platforms. Therefore, it is unjust to hold the platforms to liable for seller’s actions.

• Moreover, in a capital deficit country like India, rather than welcoming capital, the govt has been creating more and more barriers.

• There is considerable ambiguity over the new rules, which mandate that none of the platforms related parties sells directly to the consumer through the platform. But these curbs on related parties or flash sales would adversely impact both consumer choice and price.

• Considering the complex nature of issues the CCI had called for a more considered approach in its market study on e-commerce.

• For instance, on issues such as exclusive agreements or on the preferential treatment, or on the matters of deep discounts, the report did not make any sweeping judgments.

• Rather it argued case-by-case determination, not to straitjacket the regulatory architecture that governs e-commerce platforms as the draft rules seek to do.

• Further, the draft rules also require e-commerce platforms to identify goods based on their country of origin and rules mandate platforms to provide suggestions to ensure fair opportunity for domestic sellers.

• The rules make the interest of domestic manufacturers not Consumers at the core of the consumer protection framework.

Issue of overlapping Jurisdictions:

• The rules have sought to safeguard consumer data by restraining e-commerce firms from making available any info about the consumer to any person other than the consumer without such consumer consent.

• However, the data protection to be governed by provisions under the Personal Data Protection Bill not the Consumer Protection Authority.

• Similarly, the rules also state that e-commerce entities are prohibited from abusing their dominant positions in the market.

• However, the abuse of the dominant position comes under the jurisdiction of Section 4 of the Competition Act 2002.

Way ahead:

• The lines of demarcation that have been drawn up in the retail landscape serve only to protect powerful vested interests, not the consumer benefit.

• It is high time for govt to overcome this challenge by bringing a similar regulatory architecture to protect and balance offline brick-and-mortar stores and e-commerce firms.

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Prelims Questions:

Q.1) With reference to the Unlawful Atrocities Prevention Act (UAPA), consider the following statements:

1. It permits detention without charge for up to 180 days.

2. UAPA prohibits a judge from granting bail to an accused unless that judge has “reasonable grounds to believe” that the accused is not guilty.

Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Answer: C

Mains Questions:

Q.1) Critically analyse the proposed e-commerce rules for Consumers.

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