At a time when the COVID-19 pandemic is forcing over one billion people indoors across the world, e-commerce companies are presented with an unparalleled opportunity to deliver goods and services to people who cannot go outside to buy them.
Now, Reuters reports that the government will announce the creator of a new regulator to handle issues pertaining to e-commerce companies. Citing sources familiar with the plan, the agency reported that the regulator could force e-commerce companies like Amazon and Walmart-owned Flipkart to turn over information sought by authorities in compliance with Indian laws aimed at protecting consumers and ensuring fair competition.
Companies could be penalised for failing to turn over request information in time. Social media companies like Facebook could also come under its ambit, as will any company in the business of monetising user data or whose revenue is linked to advertising, Reuters reported.
The government has reportedly been in consultations with several tech companies over the last few months.
The Indian government has been deliberating on a national e-commerce policy for over a year.
The draft NECP published in February 2019 detailed goals to regulate the cross-border flow of customer’s data, streamline all product imports through the Customs route, build infrastructure to grow the e-commerce sector and deal with regulatory issues such as tax compliance, anti-trust issues, regulating advertising charges and allowing the government to “reserve its right to seek disclosure of source code and algorithms” given that an increasing number of decisions are now governed by artificial intelligence (AI) and other issue related to consumer protection.
A final NECP was initially expected by the end of 2019, however, it was pushed to 2020.
Now, the Department for Promotion of Industry and Internal Trade (DPIIT) is reportedly applying the final touches to a new draft of the e-commerce policy, after studying the Personal Data Protection (PDP) Bill and issues pertaining to non-personal data.
The Economic Times reported a source with knowledge of the development as saying the policy could likely be finalised in May. The draft would likely be released up to industry this week.
Infosys co-founder Kris Gopalakrishnan, who heads a government panel that looks into issues related to non-personal data, is expected to create a Data Governance Framework defining what non-personal data is and how its spread can be regulated.
In February 2019, India instituted new rules governing e-commerce players and FDI, barring them from offering exclusive deals for selling products (in a bid to prevent deep discounts) or having a single vendor supply more than 25 per cent of their inventory, besides restricting them from influencing prices and asking them to maintain a level playing field. These changes affected up to 40 per cent of e-industry retail sales according to a Crisil report that was released at the time.
In addition, the Consumer Protection Act 2019 (enacted in August) had mandated the creation of a Central Consumer Protection Authority to “address issues related to consumer rights, unfair trade practices, misleading advertisements and impose penalties for selling spurious and adulterated products.”
In February 2020, Food and Consumer Affairs Minister Ram Vilas Paswan said the rules would come into force in the first week of April, as would the proposed authority. A dedicated wing would also come under the CCPA to conduct investigations into matters relating to consumer rights, unfair trade practices and misleading advertisements. Consumers would also be allowed to initiate class action lawsuits under the Consumer Protection Act.
The e-commerce market in India was valued at $38.5 billion by IBEF in 2017, and was expected to grow to $200 billion by 2026. However, the impact of the coronavirus pandemic and the likely global economic recession being created by it could affect such projections.
