The government's proposed amendments to the Consumer Protection (E-Commerce) Rules, 2020 will hit online firms such as online travel firm MakeMyTrip, food delivery firms Zomato and Swiggy, ride-hailing service providers Ola and Uber, besides home services company Urban Company, according to a report in The Economic Times. These firms are reportedly These companies are currently reviewing the potential impact of the draft India e-commerce rules, the report said.
The new rules will be applicable to all electronic retailers (e-tailers) registered in India or abroad but offering goods and services to Indian consumers. The violation of the rules will attract penal action under the Consumer Protection Act, 2019.
The concerns for the above mentioned firms, especially travel firms, is that online platforms offering services have been clubbed together with platforms selling goods, the ET report said.
For instance, under the proposed changes, certain flash sales will be banned, the registration details of online retailers will be updated and the companies will need to share information with government agencies. As per a Consumer Affairs Ministry statement, a “flash sale” is a sale organised by an e-commerce entity at significantly reduced prices, high discounts or any other such promotions or attractive offers.
“Flash sales are important for the travel sector, and it's been happening for a while where airlines offer a number of seats at low prices. Even suggestions like offering local alternatives, how will it work? Do we flash an Indian airline every time someone tries to book a flight on a foreign airline, which might be cheaper than Indian alternative?” the report said, citing a person aware of the discussions.
The new rules are expected to have an impact across the board in an e-retail market India forecasts will be worth $200 billion by 2026, with players including from Tata's BigBasket, Reliance Industries' JioMart and Softbank-backed Snapdeal to market leaders Amazon and Flipkart, Reuters said.
The Centre will finalise the rules after July 6. Stakeholders have been given time till then to provide their comments.