E-commerce’s legal responsibility conundrum: Phone calls for bigger collaboration involving all stakeholders

By Arvind Mayaram & Garima Sodhi

Amidst the outcry over the economic decline during the Covid-19 pandemic, a single business that not just survived but thrived, exhibiting an unparalleled advancement, is e-commerce. Even right after the actual physical stores have opened, the e-commerce sector in India is predicted to increase impressively at 21.5% in 2022. This wouldn’t have been doable with no customers trusting the on the net mode of shopping to get the right product they were wanting for.

E-commerce is a network of various entities performing jointly to carry the suitable product or service to the shoppers. Just about every entity has its share of duties to obtain and keep the rely on of consumers in goods. CUTS Institute for Regulation & Competitors (CIRC), in its survey to comprehend the customer perception of product or service believe in and creating the finest procedures that can assist little companies to attract a lot more organization volumes, uncovered that buyers categorise getting a bogus/counterfeit products, a destroyed merchandise, and an expired product or service as factors impacting product belief. So, if a customer does not obtain the appropriate solution from their on the internet shopping, who is liable for it?

In accordance to CIRC’s study, in an offline obtain, 54.4% respondents hold a shopkeeper liable for such instances. Nevertheless, for on line shopping, 34.92% of the respondents maintain the e-commerce platform liable and 40% say both the system and the vendor are liable. It shows that the the greater part of customers are not absolutely sure who is accountable for this kind of incidents. To reinforce products have faith in in individuals to shop on line, it is necessary to bring consciousness in consumers about who is liable for these activities and greatly enhance shopper grievance redressal system.

Let us glimpse at the e-commerce benefit-chain to realize the legal responsibility conundrum.  In an offline channel, the price-chain is made up of the producer and the retailer of the product or service while, in the online channel, in addition to maker and retailer, the e-commerce platform on which the products is traded and the shipping associate are also bundled. For shipping and delivery, there are two versions: It is fulfilled possibly by the vendor by itself or the  platform’s supply companion. If a buyer gets a damaged, defective, improper or counterfeit products, then 1 or additional of these functions in the worth-chain are liable for it even so, which bash is liable relies upon on exactly where the fault lies.

In situation a customer receives a faulty solution, the company should be liable for developing a faulty product or service, but it is routed by means of the retailer who is marketing the merchandise to the client. In case a consumer gets a broken product or service, it has to be discovered no matter if the merchandise was harmed due to mishandling by the delivery companion and which bash fulfilled the delivery, the e-commerce platform or the vendor, or it was mishandled by the seller before sending it out for supply. If the incorrect solution is sent to the shopper, the liability falls on the bash satisfying the shipping. In case it is a counterfeit product, the onus is on the vendor for marketing a counterfeit product or service.

The responsibility of marketing very good high-quality, standardised items and supplying the suitable description and pictures of the products on an e-commerce web-site is that of a seller. If the vendor fails to do that, he has to be held liable for it. This is not to say that an e-commerce platform is sans any obligation. As a mere digital touchpoint for sellers and buyers, an e-commerce platform is accountable for governance to assure owing diligence on the vendor-side, obligatory specifications and licenses, fidelity of details and purchaser grievance redressal. Although there is no foolproof system to completely avert the incidents of damaged, improper and counterfeit goods on an e-commerce system, the more proven gamers in the marketplace like Amazon, Snapdeal, etc, have potent safety and compliance principles, return and refund insurance policies, buyer grievance redressal and investigation system to detect the poor actors and weed out the sellers marketing counterfeit items to minimise this sort of gatherings and offer a harmless and safe setting to the prospective buyers.

Sellers/marketplaces are the initial place for the individuals to seek out redressal, and only when a complaint continues to be unresolved ought to they consider legal recourse. This system helps the sellers, marketplaces and the authorities to function together and protect the passions of customers. The shopper defense law and the recently proposed procedures for e-commerce underneath the Act, as nicely as the jurisprudence in India, have to also present clarity on the liability of each individual bash so that the people can be shielded from and compensated rightly for these kinds of incidents.

The way forward should be larger collaboration in between all stakeholders—e-commerce players, trade bodies, buyer consortia and coverage makers—to arrive at a steady and predictable policy framework that proves mutually advantageous to all. What’s more, grievances need to be acknowledged and addressed in a time-sure method. This will require placing up of conventional functioning processes at equally the government’s and e-commerce’s close. Though significant strides have been manufactured to formalise on the net grievances, there is scope to evangelise these avenues further in the customer local community.

In a place that has flourishing grey marketplaces, banning or delisting of sellers may well not provide the objective. The solution lies in very best practices and education and learning.

Mayaram, a former Union finance secretary, is chairman, and Sodhi is senior policy analyst, CUTS Institute for Regulation & Levels of competition.

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