New Delhi: E-commerce platforms could now be in for trouble if they post fake reviews and bogus ratings for products, manipulate the algorithm to display certain products as more favourable than others, or do anything that appears to deceive customers in any manner.
The Parliamentary Standing Committee on Subordinate Legislation on ‘Consumer Protection (E-Commerce) Rules, 2020’ has in its report asked the Department of Consumer Affairs to establish a corrective mechanism to check the rise of what it called “deceptive tactics” on e-commerce platforms.
Asking the department to crack down on such cases, the committee cited Rule 6 of the recently enforced Consumer Protection (E-commerce rules), 2020, under which “no such seller shall falsely represent itself as a consumer and post review”.
The Department of Consumer Affairs functions under the Ministry of Consumer Affairs, Food and Public Distribution.
At a meeting of the Rajya Sabha standing committee last year, the minutes of which were accessed by ThePrint, Secretary, Consumer Affairs, Leena Nandan said the Central Consumer Protection Authority (CCPA) will have an investigation wing headed by director general (investigation) to curb fake reviews on e-commerce sites and keep a tab on such matters.
The wing will also be assisted by a team of experts possessing the required domain knowledge and expertise to investigate the reviews, according to the minutes.
A senior official from the department, who did not wish to be named, told ThePrint: “Most of these domain experts will work as content regulators, which will not only help in flagging fake reviews but also investigate it.”
The official added: “These domain experts will also keep a tab on the presence of reviews containing vulgar, obscene or improper language on these platforms. It will be then duly taken up with these organisations to curb their prevalence.”
Nandan had also informed the committee that the CCPA will take requisite action once it is sufficiently proven that the e-commerce entity being probed has posted fake reviews or tinkered with the algorithm.
The meeting of the eight-member standing committee was chaired by Punjab MP Partap Singh Bajwa. Apart from Nandan, many other senior officials of the department were present.
The meeting also took up issues of user privacy and data security, and said the department must keep a check on ‘predatory pricing’, ‘click farms’ and ‘dip pricing’ used by e-tailers to beat competition.
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Besides fake review and manipulation of algorithms, the committee also took up the matter of protection of personal information of consumers on e-commerce platforms. Pointing out that e-commerce sites tend to prompt consumers to save details of credit/debit card details, the committee expressed privacy and security concerns citing instances of consumer data leak by e-commerce call centres and the absence of a law to tackle this.
The committee noted that the privacy of the users and their data security is of utmost importance and the citizen’s “right to be forgotten” online is paramount.
It recommended that user data must be categorised according to the level of their sensitivity, with appropriate protection level assigned to them. A robust and secure system of payment gateway should be made available to consumers to prevent compromise of their transaction-related data.
The committee recommended that all major e-commerce and marketplace entities should establish their data centres in India so consumer data is not hosted outside the country, which may be used by any “enemy country”.
It batted for a provision in the Consumer Protection Rules itself that “protection to the personal data of the consumers using e-marketplace, will be given under the Personal Data Protection Bill, 2019”. The Bill, introduced in the Lok Sabha early last year, had been referred to a Joint Parliamentary Committee of Parliament for examination and report in February 2020.
The standing committee headed by Bajwa said a system should be put in place to integrate small retailers in e-commerce.
It also pulled up the Department of Consumer Affairs for failing to keep adequate checks on the prevalent practices of ‘predatory pricing‘, ‘click farms’ — fraud intended to manipulate app store rankings and search results by inflating web traffic to a particular product after getting inadvertent clicks from the user — used by online marketplaces to gain an edge over competitors.
The committee also expressed concern over ‘drip pricing’, a technique used by online retailers in which a headline price of goods or services is advertised at the beginning of the purchase process, but additional fees, taxes or charges, which may be unavoidable, are later incrementally disclosed or ‘dripped’.
In addition, the committee observed that there is no clear mechanism to monitor delivery charges paid by consumers to get the products sent home. Hence, it said, the ministry should issue guidelines to fix delivery charges by the marketplace entities and also put a cap on the highest limit on the peak-hour charges for such services.
(Edited by Sanghamitra Mazumdar)
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