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No More ‘dhamaka Sales’ On Ecommerce Sites, Govt Proposes Ban

The Indian government suggested various changes to the country's e-commerce legislation on Monday in order to combat widespread cheating and unfair trading practices in the ecosystem. According to a statement released by the Food and Consumer Affairs Ministry on Monday, among the suggested reforms are a prohibition on some types of flash sales and punitive action against the platform if merchants fail to fulfil them.

According to the statement, the proposed rule changes aim to increase transparency, enhance the regulatory framework, protect consumers' interests, and encourage free and fair competition.

Within 15 days, the government has requested comments and ideas on these revisions to the Consumer Protection (E-commerce) Rules, 2020. (by July 6, 2021).

"Some e-commerce entities are limiting consumer choice…where one seller selling on a platform does not have any inventory or order fulfilment capability but simply places a 'flash or back-to-back' order with another seller controlled by the platform," the Ministry said, proposing a ban on certain types of flash sales. "This creates an unequal playing field, limiting customer choice and raising prices."

Traditional flash sales by third-party vendors are not prohibited on e-commerce platforms, according to the government's statement.

In addition, a framework for registering all e-commerce entities has been proposed. It states that the assigned registration number will be prominently displayed on the website as well as on each order's invoice.

This "would assist in the creation of a database of genuine entities and ensure that consumers can verify their authenticity prior to transacting."

"The practice of misselling has been outlawed. That is, selling goods and services through the intentional distortion of data. " In a statement, the Ministry said:

The guidelines went into force on July 23 of last year, with the goal of eliminating unfair trading practices in the e-commerce industry. The proposed revisions can be found on the Department of Consumer Affairs' website.


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