India government proposes new consumer protection rules for e-commerce platforms News
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India government proposes new consumer protection rules for e-commerce platforms

The Indian government on Wednesday has proposed a new set of amendments to Consumer Protection (E-commerce) Rules, 2020 in response to complaints of unfair trade practices in the Indian e-commerce ecosystem.

The new amendments will primarily curtail “back-to-back” and “flash” sales, where the seller allows for the commencement of such sales despite lacking the capability to fulfill them. These orders are subsequently put forth to another seller controlled by the platform. Such tactics by e-commerce platforms such as Amazon and Flipkart have led to limiting customer choices, increasing prices, and preventing a level playing field. The draft of new amendments is now open to public comments for 15 days.

Accusations that e-commerce giants such as Amazon and Flipkart are harming sellers and consumers are currently being investigated by the Competition Commission of India, owing to a market study suggesting that e-commerce platforms need to be self-regulated. However, the results of the investigation have been delayed following a petition by Amazon in the Karnataka High Court to quash the investigation. The petition was subsequently denied on June 11, which has resulted in restarting of the investigation on practices of Amazon and Flipkart.

The ongoing deliberation on the Antitrust facet of practices implemented by e-commerce giants and the new draft of Amendments suggested under the E-commerce Rules, 2020 can be considered as steps toward the regulation of e-commerce platforms. However, the legal ramifications of them over the consumers are still under speculation.

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