The draft rules, released Monday for public comment, proposed that e-merchants identify products by country of origin at the pre-purchase stage and suggest alternatives to ensure “a fair opportunity for domestic products.” . They were also asked to provide ranking parameters so that domestic sellers were not discriminated against.
The move created some anxiety among e-commerce players, but government officials said they only need to provide an explanation of how they categorize products, which consumers can easily understand and that there is greater transparency.
“The proposal is not to ban the sale of any imported item. But, they must disclose the country of origin. Many customers may want to buy domestic products. The purpose of the proposed rules is to keep the consumer informed, ”said Nidhi Khare, additional secretary at the Ministry of Consumer Affairs.
Although the ranking provision was introduced in July 2020, the latest move aims to expand it to remove any ambiguity. “There have been complaints from e-commerce platforms using opaque mechanisms to push the sale of particular brands. It will not be allowed, ”said an officer.
Government sources have indicated that the new rules are intended to ensure that companies that use algorithms to push certain brands, especially their private labels, as well as entities in which they have a stake do not receive an unfair advantage.
For example, the rules propose that related parties or associated businesses not be listed as sellers, in addition to requiring them to ensure that consumer data is not shared with these entities to give them an ‘unfair advantage’. . In addition, there is nothing that associates or related parties can do that e-commerce platforms cannot do on their own.
So far, Amazon and Flipkart have declined to comment on the guidelines, although executives have suggested some of the changes will impact their operations.
While some of the companies have suggested the new rules will result in an inspector raj, the consumer ministry has sought to allay those fears.
Khare said the government is not proposing to regulate or demand disclosure of flash sales organized by e-commerce companies, while adding that “fraud” and “back-to-back” flash sales will not be allowed as they limit competition. loyal. in commerce and make small businesses uncompetitive.