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Predatory pricing & deep discounts set to go with new e-commerce rules
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Thursday, 14 November, 2019, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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The Ministry of Consumer Affairs has released the Consumer Protection (e-commerce) Rules 2019 setting liabilities of e-commerce entities under the Consumer Protection Act 2019. For the food delivery sector, the move has raised hopes of an end to predatory pricing and deep discounts.
The new rules describing liabilities of e-commerce entities say that an e- commerce entity shall not, directly or indirectly influence the price of the goods or services and shall maintain a level playing field, shall not adopt any trade practice which for the purpose of promoting the sale, use or supply of any goods or for the provision of any service, or composite supply, adopt any unfair methods or unfair or deceptive practice that may influence transactional decisions of consumers in relation to products and services, falsely represent themselves as consumers or post reviews about goods and services in their name or misrepresent or exaggerate the quality or the features of goods and services.
The Consumer Affairs Ministry has sought comments on the draft rules by December 2.
The norms also state that the e-commerce entities should accept return of goods if delivered late from the stated delivery schedule or delivery of defective, wrong or spurious products, and/or not of the characteristics/features as advertised.
The rules further talk about liabilities of the sellers using e-commerce platform and that such sellers should have a prior written contract with the e-commerce entity and display single-figure total and breakup price for the goods or service, that includes all compulsory charges such as delivery, postage, taxes and handling and conveyance charge.
The rules also suggest creation of the consumer grievance redressal procedure and publish a name on its website of the grievance officer and his contact details as well as mechanism by which the users can notify their complaints about product and services availed through e-commerce websites.
Welcoming the development, Anurag Katriar, president, National Restaurant Association of India, told FnB News, “The move may end predatory pricing and deep discounts. We strongly feel that discounts 365 days do not look as special as when they are periodic and episodic to the customers.”
When questioned, what exactly are predatory pricing and deep discounts, Katriar explained, “It can be described as a discount that amounts to 50% and more. For example, if we are having a margin of 20% and the discount offered is 10% and more, it is predatory pricing.”
Meanwhile, the Confederation of All India Traders (CAIT) termed the new rules a positive step of the government towards curbing the alleged malpractices by e-commerce players.
The traders’ body in a statement here said that the e-commerce players not only destroy domestic trade but also mislead the consumers.
CAIT, in this regard, had also made representation to Union Consumer Affairs Minister Ram Vilas Paswan to take steps against unethical trade practices of these companies.
CAIT secretary-general Praveen Khandelwal said that the new rules inserted some new clauses like mandatory display of contract between marketplace and seller, no misleading advertisements, mandatory mentioning of safety & healthcare information, formation of a grievance office and likewise also made provision of various liabilities of seller as well.
He said, “This will certainly force the e-commerce entity to be more transparent and impartial and accountable towards consumers which in other way will create an even level playing field,” and added that however, the Consumer Affairs Ministry has to ensure that e-commerce companies should follow the rules not only in letter but in spirit as well.
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