Govt. proposes Ban on Mis-selling and Fraudulent Flash Sale of Goods and Services on E-Commerce Platforms [Read Draft]

fraudulent flash sale of goods and services - e-commerce platforms - Taxscan

The Government notified the sought public comments on banning mis-selling and fraudulent flash sale of goods and services on e-commerce platforms, and also on making registration of these entities mandatory with the Department for Promotion of Industry and Internal Trade (DPIIT).

The Consumer Protection (E-Commerce) Rules, 2020 were first notified in July last year. Their violations attract penal action under the Consumer Protection Act, 2019.

In its proposal, India’s Ministry of Consumer Affairs said that e-commerce firms should not be allowed to hold flash sales in India. These flash sales, akin to Black Friday and Cyber Monday sales in the U.S., are very popular during the festive season in the country. During flash sales e-commerce firms have traditionally observed the biggest spikes in customer orders as brands offer heavy discounts on their products.

The Ministry of Consumer Affairs in its proposal said that e-commerce firms should not be allowed to hold flash sales in India. These flash sales, akin to Black Friday and Cyber Monday sales in the U.S., are very popular during the festive season in the country. During flash sales e-commerce firms have traditionally observed the biggest spikes in customer orders as brands offer heavy discounts on their products.

E-commerce entities are also required to provide information not later than 72 hours of the receipt of an order from a government agency for prevention, detection and investigation and prosecution of offences under any law, as per the proposed amendments.

The government has proposed ban on mis-selling of goods and services offered on such platforms. Those engaging in ”cross-selling” will have to provide adequate disclosures to users displayed prominently.

It has also proposed a ban on display and promotion of misleading advertisements. E-commerce entities offering imported goods/services will also have to mention name and details of the importers and the ”country of origin”.

The government has proposed amending the Rules to ensure ”sponsored” listing of products and services are distinctly identified with clear and prominent disclosures, and entities are banned from using any information collected through their platform for ”unfair” advantage of related parties or associated enterprises.

“Views/ comments/ suggestions on the proposed amendments may be sent within 15 days (by July 6, 2021) by email to js-ca@nic.in,” Anupam Mishra, joint secretary in the consumer affairs ministry, said in a public notice.

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