India`s e-commerce market is one of the fastest growing in the world. The value of Indian e-commerce was $46.2 billion in 2020 and is expected to increase by 18.29% to $136.47 billion by 2026. E-commerce activity is on the rise, as is the use of digital payment systems. The momentum in this distribution channel has continued to grow, but has been amplified during the COVID-19 pandemic. It is advantageous to have a distributor with an online presence and a dedicated website that is able to market your product through the ecommerce channel. E-commerce is subject to the Competition Act, which was enacted by the Government of India to enforce pricing and distribution laws. To avoid violations of competition law, U.S. companies must be aware of these provisions and include relevant clauses in distribution partnership agreements. www.ibef.org/news/vision-of-a-new-india-US$-5-trillion-economy, accessed October 7, 2020. [xxix]. Subsection (ii) of Section 5.2.15.2.4, Consolidated FDI Policy (effective October 15, 2020). The draft rules of procedure add that no e-commerce enterprise may abuse its dominant position in any market.
When an e-commerce company holds a dominant position in a market, it can resort to undervaluing its goods and services in order to make competing companies untenable. This can reduce consumer choice and thus affect consumer interest. While factors related to market position may affect consumer welfare, it can be argued that their regulation does not fall within the scope of the Consumer Protection Act, 2019 and may therefore be the ultra vires draft rules of the Mothers Act. According to the UNCTD`s B2C E-Commerce Index 2019, which measures an economy`s willingness to support online shopping, India ranks 73rd with 57 index scores, seven times better than the 80th ranking index report 2018 (UNCTAD, 2019a, 2019b). The e-commerce industry has become a pioneer in the Indian economy, with an internet penetration rate of about 50%, nearly 37% of smartphone internet users, the introduction of 4G network, internet content in the local language and increasing consumer prosperity. Massive infrastructure and policy support has boosted the e-commerce industry to $64 billion in 2020, up 39% from 2017 and will reach $200 by 2026 at a CAGR of 21%. Footnote 7 Now, India envisions a saving of five trillion dollars Footnote 8 by 2024. At the current rate of growth, it would be difficult, but not impossible, to push for robust e-governance and a digitally strengthened society.
The proliferation of smartphones, increasing access to the Internet and the rise of digital payments, as well as policy reforms are accelerating the growth of the e-commerce sector vis-à-vis the economy. The draft rule requires e-commerce companies to provide information under their control or possession by order of a government agency. Such an agency is legally authorized for investigative, protective or cybersecurity activities. This information is necessary to verify identity or to prevent, detect, investigate or prosecute criminal offences under a law or for cybersecurity incidents. The Consumer Protection Act 2019 and the draft regulation deal with consumer protection with regard to the sale or purchase of goods and services through the platform of an e-commerce company. The objectives of the act do not include prosecution. Enforcement provisions for online platforms are dealt with under the Information Technology Act 2000 (Information Technology Act). [xx] The draft rules of procedure could go beyond the scope of the general law by containing such a requirement. He would have a prior written contract with the e-commerce company to make the sale.
Respondents` confidence in online shopping shows that a secure and reliable system was essential for 93% of respondents. For almost the same proportion, information about how e-commerce businesses operated was a key factor in security solutions. When choosing a payment option, 76% of respondents prioritized “pay on delivery – online transfer at the door. In terms of protecting personal data shared by online shoppers, 52% said this aspect was important to them. Factors such as warranty (67%) and customer service (69%) were important factors in building trust with electronic entities. Site information (easy navigation/user-friendliness and reviews) was important or very important, with 77% of respondents gaining the confidence to buy online. Information about product characteristics and their manufacturer/supplier was essential for 86% of respondents to establish trust in the product and supplier (manufacturer) and e-commerce unit. With the ABI model discussed above, it is believed that security, privacy, warranty/guarantee, customer service, and information factors on the website positively affect the trust of ecommerce customers. Identifying research gaps requires a review of the literature on various aspects of e-commerce and consumer protection over a two-decade period. An objective review of 36 highly rated publications (Scopus/Web Services/ABDC Ranking or similar) related to e-commerce from more than 100 articles published over the past 20 years (2000-2020) suggests that the vast majority of previous studies in this area have been conceptual/theoretical and generic. With regard to the legal framework for e-commerce and the protection of consumer rights, six recent contributions have been available for analysis and consideration exclusively in the Indian context. It should be noted that while the focus on privacy and consumer legal protection concerns is too broad, the review of the regulatory framework has limited its scope.
A review of some studies on the protection of legitimate expectations and consumer rights in electronic commerce, as shown in Table 3, shows that enforcement aspects, in particular legal issues, are lacking. India`s experience in consumer protection in e-commerce through case law is emerging. Synthesis studies show that research on a combination of management and legal analyses is lacking in e-commerce and legal consumer protection. This scenario showed a gap in exploring a broader research opportunity in the Indian context. The draft rules prohibit a marketplace e-commerce company from selling goods or services to people registered as sellers on their platform. However, as discussed above, marketplaces facilitate transactions between buyers and sellers only by providing a platform. Marketplaces themselves are not sellers of goods or services. In addition, the FDI Directive allows e-commerce companies in the market to transact with registered sellers on their platform on a business-to-business (B2B) basis. [xxix] This provision of the draft rules of procedure may conflict with FDI policy. The e-commerce sector in India has seen remarkable 34% compound annual growth rate (CAGR) growth since 2009 and is expected to grow at a CAGR of 63% to reach around USD 8.5 billion in 2016. However, as in all other thriving sectors, there are challenges in this sector, one of which is an inadequate and ineffective legal and regulatory framework capable of guaranteeing the rights and obligations of the Parties.
India enacted the Information Technology Act in June 2000. But this is just enabling legislation; We need more regulations to make e-commerce transactions fairer and achieve a more consumer-friendly e-commerce environment in India. This article attempts to analyze the current laws and regulations for e-commerce in India, their effectiveness in dealing with the legal issues of e-commerce and the need to further complement this area. Analysis of multiple regression suggests that since the P= value of each independent variable is below the significance level of 0.05%, the independent variables security, privacy, warranty, customer service, and website information are all significant. Alternatively, the total P-value of 0.032 with R2 0.82 supports the assumption that security, privacy, warranty/guarantee, customer service, website information factors have a combined impact on the trust of ecommerce customers. Lăzăroiu, G., Neguriţă, O., Grecu, I., Grecu, G., & Mitran, P. C. (2020). Consumer decision-making process on social commerce platforms: online trust, perceived risk and purchase intentions. Frontiers in Psychology, page 11, 890 doi.org/10.3389/fpsyg.2020.00890. Nardal, S., & Sahin, A.
(2011). Ethical issues in e-commerce based on e-commerce.