FPJ Edit: Using rules to unfairly cramp 
e-commerce players is regulatory overreach

For a party which came into power with the promise of a ‘digital India’ for all, the BJP appears distinctly uncomfortable with big tech, given its repeated attempts to use the regulatory process to try and bend tech platforms to its will. Even as the storm kicked up by the IT (Intermediaries) Rules, 2021, is yet to settle, with the government’s face-off with social media platforms like Twitter escalating, the Ministry of Consumer Affairs, Food and Public Distribution has come out with a sweeping set of regulations under the Consumer Protection (E-Commerce) Rules, 2020, ostensibly aimed at fostering competition and helping consumers.

But provisions like requiring e-commerce companies like Amazon and Flipkart to register with the Department of Promotion for Industry and Internal Trade (DPIIT), and asking them to appoint a ‘chief compliance officer’ on the lines of social media platforms, or requiring them to appoint a nodal officer to respond to law enforcement agencies on a round-the-clock basis make little sense for e-commerce portals which are aimed at transacting business, not to function as media platforms.

These platforms have also been tasked with displaying the ‘country of origin’ on every product, and also ensure a ‘fair opportunity’ to domestically manufactured goods. The vague wording of such directives ensures considerable room for bureaucratic interpretation, opening the door for the return of control raj, not to speak of escalating legal battles. In fact, major platforms like Flipkart and Amazon are already in court to try and prevent the Competition watchdog from reopening its probe into their business practices. Other measures like banning ‘flash sales’ and ‘back-to-back’ sales, ostensibly to protect consumers, will actually have the opposite effect of being anti-competitive and anti-consumer.

The challenge before the government is to walk the middle path. It can and should try to ensure that the law provides a level playing field for all and that one section of players is not unfairly disadvantaged over the other. But using one’s powers of rulemaking to unfairly cramp one set of players is simple regulatory overreach.

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