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Standard Regulating Reviews On E-commerce Platforms – Dodd-Frank, Consumer Protection Act

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India has one of the fastest growing e-commerce markets in the
world and e-commerce transactions have steadily increased across
the nation during the past several years. Consumers heavily rely on
reviews posted on e-commerce platforms to understand the experience
of customers who have already purchased the goods or services, and
online reviews have significant influence over purchasing decisions
of the consumers.

The Department of Consumer Affairs
(“Department“) had constituted a
committee on 10th June, 2022 to develop a framework for
checking fake and deceptive reviews in e-commerce transactions.
This committee consisted of various stakeholders including
e-commerce companies, industry associations, consumer
organizations, law chairs and industry players like Tata Sons,
Amazon, Flipkart, Reliance Retail, Google, Meta (Facebook), Swiggy and Zomato, as well as
industry bodies like CII, FICCI and NASSCOM.

Recognising the effects of false and misleading reviews and to
safeguard consumer interests in e-commerce, a framework titled
Indian Standard (IS) 19000:2022 ‘Online Consumer Reviews
— Principles and Requirements for their Collection,
Moderation and Publication
(“Standard“)1 was launched by
the Department along with the Bureau of Indian Standards
(“BIS“) for safeguarding and protecting
consumer interest from fake and deceptive reviews in e-commerce.
The Standard has come into effect from November 25, 2022.

The Standard is applicable to:

  1. Every online platform that publishes consumer reviews
    online;

  2. Suppliers/sellers of goods and services who collect reviews
    from their own consumers;

  3. A third party contracted by the suppliers/sellers; or

  4. An independent third party.

All e-commerce platforms would initially be free to voluntarily
comply with the norm. In order to evaluate compliance with the
Standard, BIS will also create a conformity assessment scheme. When
the Standard is made mandatory, consumers will be able to file
complaints with the National Consumer Helpline, Consumer
Commissions, or the Central Consumer Protection Authority regarding
any entity that violates the Standard, as any such violation will
be considered to be an unfair trade practice or a violation of
consumer rights.

Following are some of the key points mentioned in the
Standard:

  • Both the review author (i.e., the consumer who is writing the
    review to be published on the website) and the review administrator
    (i.e., organization or individual having the responsibility to
    manage the consumer review content) are given specific
    responsibilities under the Standard. For a review author, these
    include assurances that they have read and agree to the terms and
    conditions and are giving their contact information before
    publishing a review. For a review administrator, these include
    collecting and protecting personal information of the review author
    as well as staff training.

  • The Standard outlines the duties of the entities, such as
    creating a code of practice to outline how the Standard and its
    guiding principles will be met and maintained and making this code
    available publicly to consumers at an easily accessible place;
    developing a written set of terms and conditions like
    accessibility, non-compliance, criteria and ensuring that the
    content of the review does not contain financial information
    capable of resulting in identity theft, marketing materials, among
    other things.

  • The standard also outlines procedures for authenticating the
    identity of the review author through their email address,
    identification via phone call or SMS, confirmation of registration
    by clicking on a link, using a captcha system, etc. to determine
    the review author’s traceability and veracity.

  • The Standard provides for processes that will need to be
    followed for collection, moderation and publication of reviews from
    consumers.

  • Regarding moderation, the standard outlines both automated and
    manual modes of moderation as well as methods for analyzing review
    content.

  • The criteria for publication includes considerations for the
    review administrator both during and after the publication process.
    In the publication process, parameters for review accuracy, default
    display, and weightage of ratings are defined.

  • The Standard also allows review administrators to offer rewards
    to review authors subject to the condition that such reviews are
    separately marked.

  • Once a review is placed and made live on a website, customers
    won’t be allowed to change it. Additionally, they must abide by
    the general rules as well as the rules specific to the
    website.

If an e-commerce entity wants to check whether their website is
adhering to the Standard, they can go to the BIS and get it checked
and get certified. But if they do not adhere to the Standard and if
they are indulging into a practice which can be termed as an unfair
trade practice, then a consumer court can take penal action under
the provisions of the Consumer Protection Act, 2019.

Footnote

1. https://www.pib.gov.in/PressReleasePage.aspx?PRID=1877733

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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