E-Commerce: Legally Indemnified?

Jan 14, 2023


E- Commerce is the dominant industry in the age of computers and internet, where every consumer has a smartphone and an internet through which they can order anything with a click of a button, at the cheapest prices available with infinite discounts and sales and a variety of options to choose from but at the same time, it seems too convenient of an idea to be true, and giving justice to its dark side, it does come with its own risks.

E-Commerce and its risks

This industry has no seller validity as anyone can become a seller on any of the popular websites like Amazon, Flipkart etc., as they only require the registration of PAN and an active bank account to register oneself as a seller. The consumer is the one on the tightrope as to whether trust a random seller and get a defective product or go to a trusted seller and buy the same thing for a much higher price. The consumer takes the risk on the trust built by the facilitator such as Amazon, but the seller continues to be a mystery. This mystery is what the Consumer Protection and the IT rules in India strive to replace and fulfil the role of and keep total transparency between the seller and the consumer creating an apparent legal relationship between them.

But if we look away from the major facilitators in this world, there are plenty of ecommerce websites which sell their own products as a standalone site and millions of them which copy these authentic websites to try and extort money and bank details from these consumers, and since the ecommerce market is outside the bounds of simple physical boundary set, it creates a problem of jurisdiction

creating an overlap of rules and acts set by the countries.A lot of times, the main problem lies with the terms and conditions of the website which we often say ‘yes’ to without thinking creating a legal bond which is irreversible getting us trapped.

Rights in India for E-Commerce

In India, there have been several amendments and acts which have been passed in order to protect the rights of the consumers and help them have a smooth and risk-free experience in the e-commerce market.

  • Income Tax Act, 1961
  • Information Technology Act, 2000
  • Foreign Exchange Management Act, 1999
  • FDI Policy
  • Payment and Settlement Systems Act 2007
  • Companies Act, 2013
  • Laws related to Goods and Services Tax
  • Consumer Protection Act, 2019

Consumer Protection(E-Commerce) Rules, 2020

Under the Consumer Protection Act, 2019 there has been a new section known as Consumer Protection(E-Commerce) Rules, 2020 specifically to serve in the interests of the consumers when using the service of E-commerce, it establishes various liabilities and duties of these E-Commerce sites and sellers to follow such as-

  • No e-commerce entity shall adopt any unfair trade practice, whether in the course of business on its platform or otherwise.
  • Every e-commerce entity shall ensure that the grievance officer referred to in sub-rule (4) acknowledges the receipt of any consumer complaint within forty-eight hours and redresses the complaint within one month from the date of receipt of the complaint.
  • Where an e-commerce entity offers imported goods or services for sale, it shall mention the name and details of any importer from whom it has purchased such goods or services, or who may be a seller on its platform
  • Every e-commerce entity shall only record the consent of a consumer for the purchase of any good or service offered on its platform where such consent is expressed through an explicit and affirmative action
  • Every e-commerce entity shall effect all payments towards accepted refund requests of the consumers as prescribed by the Reserve Bank of India or any other competent authority under any law for the time being in force, within a reasonable period of time.
  • E-commerce entity shall require sellers through an undertaking to ensure that descriptions, images, and other content pertaining to goods or services on their platform is accurate and corresponds directly with the appearance, nature, quality, purpose and other general features of such good or service.
  • Every marketplace e-commerce entity shall include in its terms and conditions generally governing its relationship with sellers on its platform, a description of any differentiated treatment which it gives or might give between goods or services or sellers of the same category
  • Accurate information related to return, refund, exchange, warranty and guarantee, delivery and shipment, cost of return shipping, mode of payments, grievance redressal mechanism, all mandatory notices and information required by applicable laws, display single figure total along with the break-up price and ticket number for each complaint from which the consumer can track the status of complaint.


These rules under the act clarify very well the obligations of the different sellers in the E-Commerce space limiting the scope of fraud against a reasonable consumer and give as much possible legal protection as they possibly can. The regulations provide an even playing field for all e-commerce participants and represent a substantial advancement in digital governance. Although its implementation increases platform maintenance and data uploading costs, it would also increase operational costs for all ecommerce stakeholders, including small sellers. This is because operational detailing would require a large amount of labor.

Thus, the Internet is not exactly an unregulated medium contrary to popular belief. When you browse the Internet, the laws of any jurisdiction still apply; the only distinction is how they might do so. The Cyberspace colonization is driven by technology and by business opportunities. Indeed, technology poses both a threat and a solution since it, on the one hand, challenges the legal and regulatory frameworks that are already in place while, on the other, providing the answer to many of those risks, such as security, integrity, and authenticity. http://www.reso.co.in

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