E-commerce marketplace entities will have to put in place an effective grievance redressal system if they wish to shield themselves from lawsuits arising from a botched sale on their platforms.

The move to recast the rules will subject e-commerce giants to a regulatory template that borrows heavily from the contentious regime that governs information technology giants under the revised intermediary regulations that came into effect last month.

The consumer affairs ministry on Monday floated a draft Consumer Protection (E-Commerce) Rules 2020 that grants e-commerce players exemption from liability against lawsuits from irate consumers in much the same way as set out in the IT intermediary rules.

“A marketplace e-commerce entity which seeks to avail the exemption from liability under sub-section (1) of section 79 of the Information Technology Act, 2000 (21 of 2000) shall comply with sub-sections (2) and (3) of that section, including the provisions of the Information Technology (Intermediary Guidelines) Rules, 2011," the e-commerce rules say.

Section 79 of the IT Act grants an IT intermediary exemption from any liability if it “observes due diligence while discharging his duties... and also observes such other guidelines as the Central Government may prescribe”.

The protective cover disappears if the intermediary conspires, abets, aids or induces the “commission of an unlawful Act”.

The extension of the same safe harbor provision to the e-commerce players may not ignite fierce protests as have been raised by Twitter and WhatsApp but there will be a deep sense of foreboding about the fallout of any guidelines that the government may frame in the future.

The draft law also says that every marketplace e-commerce entity shall include in its terms and conditions 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 in the same category.

No logistics service provider of a marketplace e-commerce entity shall provide differentiated treatment between sellers in the same category, it added.

Under the grievance redressal system, the e-commerce platform will have to provide all information relating to a seller including his address on request after a sale to aid dispute settlement resolution.

E-commerce firms will now have to appoint a chief compliance officer who shall be responsible for ensuring legal compliance and is liable for any proceedings related to any relevant third-party information, data or communication link made available or hosted by e-commerce entity.

The compliance officer has to be a resident Indian citizen. The companies also have to appoint a nodal contact person for 24x7 co-ordination with the law enforcement agencies and officers to ensure compliance to their orders .

A grievance redressal mechanism has to be put in place by the e-commerce entity along with appointing a resident grievance officer who is an Indian citizen.

The co-ordinates of the grievance officer have to be put up on the website.

The e-commerce firms must have mobile apps along with a mechanism for users to make complaints against violation of the provisions of the rules and other matters.