Cabinet Proposes New Authority for E-Tailers

  • Govt Finds Sharp Increase In Online Trade
  • The consumer affairs ministry has moved a Cabinet proposal to bring e-commerce and direct selling under the ambit of the                consumer protection law.
  • If teleshops and e-tailers fail to take back defective items and return the amount paid by a customer within a month even after a        request is made, action can be initiated against such players.
  • The move will directly impact etailers such as Flipkart, Amazon, makemytrip, bookmyshow, among others.
  • These changes have been included in the proposed amendments, considering a sharp increase in online buying and selling of goods      and services.
  • The changes have been  included in the proposed amendments, considering sharp increase in online buying and selling of goods          and services.
  • The changes have become necessary since many consumers are buying online or through telemarketing companies simply after          going through advertisements, leading to a direct interaction between buyers and sellers.
  • However, there is a catch in this proposal. It says an :electronic intermediary shall not be said to have engaged in `unfair trade         practice' if it facilitates manufacturers, traders or other persons, who use such electronic intermediary for advertising, selling or           providing goods or services.
  • This has been done to differentiate between those actually sell goods services and those just work as marketing entities, though         there is a section of people, who believe this provision would be “exploited“ by the e-tailers.
  • Considering that consumers can file a case or complaint only if they have a cash memo or bill, there is also a proposal to make it         mandatory for sellers to provide such transaction records.
  • In case the seller fails to provide this, the consumer can file a complaint with competent authorities and action can be initiated for       such “unfair trade practice“.
  • In order to ensure that consumer rights are enforced and protected, the Cabinet note proposes setting up of a Consumer                   Protection Authority , which will have powers to act against marketing of products and services that are unsafe and hazardous.
  • The independent body will also have the responsibility of informing consumers about the quality , purity , standard, misleading           and deceptive advertisements by sellers.
  • It will have the power to conduct investigation -both suo-motu or on a complaint -conduct search, seizure of documents, articles         and records.
  • It can also summon delinquent manufacturers, advertisers, besides ordering recall of goods on the basis of investigation that are       unsafe or hazardous, issue safety notices, and order withdrawal of false or misleading advertisements.
  • The authority can also impose administrative fine on those found violating the law.
  • It will be based on the impact of violation with respect of population and area affected, frequency and duration of violation,               vulnerability of people and the gross revenue that a manufacturer has got from sales.