The Consumer Protection (E-Commerce) Rules, in general terms
The Consumer Protection (E-Commerce) Rules 2020 set out obligations for
e-commerce entities, covering matters such as clear seller identification,
disclosure of terms including returns, refunds and delivery, and a grievance
redressal mechanism. The specific obligations differ depending on whether the
platform operates as a marketplace, hosting third-party sellers, or on an
inventory basis, selling its own stock directly. Platforms that have not
mapped their actual model against the applicable rules sometimes discover
the mismatch only when a complaint or a regulatory notice forces the
question.
Marketplace versus inventory liability
A marketplace platform is generally expected to disclose that it is
facilitating a sale by a third-party seller rather than selling directly, and
its liability for issues with the product itself typically differs from that
of an inventory-based seller who is the actual seller of record. Getting this
distinction wrong in the platform’s own terms and disclosures, describing
itself as a marketplace while functioning operationally as the seller, can
undermine the very distinction it is relying on. Seller agreements need to
allocate responsibility for product quality, returns and disputes clearly,
because a platform that leaves this ambiguous ends up defending complaints
that were, on the actual facts, the seller’s responsibility.
Returns, refunds and unfair trade practice exposure
Returns and refund practices, along with pricing tactics like flash sales
and discount claims, are a frequent source of complaints alleging unfair
trade practice under the Consumer Protection Act 2019. A published policy
that does not match how the platform actually processes returns, or a
discount claimed against an inflated reference price, is the kind of gap
that draws both individual complaints and, at scale, regulatory attention
from the Central Consumer Protection Authority.
Counterfeit listings and brand protection
Marketplaces carrying third-party listings face a recurring problem with
counterfeit or infringing products listed by sellers the platform does not
control in real time. Brand owners pursue takedown requests and, where
necessary, enforcement action under the Trade Marks Act 1999 and the
Copyright Act 1957, and a platform’s own exposure depends significantly on
how promptly and consistently it acts on legitimate takedown requests once
notified, rather than on whether the infringing listing appeared in the
first place.
