E-Commerce Compliance

Navigating the Regulatory Landscape for Online Success

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Compliance for Seamless Online Operations

Overview

Section 2(16) of the Consumer Protection Act, 2019 defines “e-commerce” as buying and selling of goods or services including digital products over digital or electronic network.

The business models facilitated by e-commerce are –

B2B (Business to Business) Transactions, whether goods or services, between business to business.
B2C (Business to Consumer) Transactions, whether goods or services between businesses to the ultimate consumer.
C2C (Consumer to Consumer) Transactions between consumers through some third party.
C2B (Consumer to Business) Transactions providing goods or services to businesses.
B2B2C (Business to Business to Consumer) Transactions in which there is an additional intermediary business to assist the first business to transact with the end consumers.

Governing Laws

Various laws govern e-commerce activities, broadly –

  1. The Information Technology Act, 2000: Section 84A casts a duty on the Central Government for the promotion of e-governance, e-commerce, and for secure use of electronic means. Section 43A provides for data protection. The e-commerce entity must comply with certain rules framed under the Act, for instance, the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011; the Information Technology (Guidelines for Intermediaries and Digital Media Ethics Code) Rules, 2021, etc.
  1. The Consumer Protection Act, 2019, and the Consumer Protection (E-Commerce) Rules, 2020: The Act and the Rule provide a framework to regulate the marketing, sale, and purchase of goods and services via online means. The Act and the Rules apply to –
    • (a) all goods and services transacted over an electronic network;
    • (b) all models of e-commerce (including marketplace or inventory based); all forms of e-commerce retail (including multi-brand or single brand);
  1. The Legal Metrology Act, 2009, and the Legal Metrology (Packaged Commodities) Rules, 2011: Rule 6(10) mandates to declare the mandatory declarations on the digital and electronic network used for e-commerce transactions.
  1. The other notable laws applicable to an e-commerce entity are: the Indian Contract Act,1972, the Sale of Goods Act, 1930; the Competition Act, 2002, etc.

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This information is in summary form and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Mind Sync does not accept any responsibility for loss occasioned to any person acting or refraining from action as a result of any information provided herein. On any specific matter, reference should be made to the appropriate advisor.

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