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Indian Govt Looking to Ban Flash Sales; Enforce Stricter E-commerce Rules

India plans to introduce stricter rules on e-commerce platforms so that companies such as Amazon and Flipkart will not hinder the sales of small businesses. The Ministry of Consumers of India has proposed new changes to prohibit e-commerce platforms from conducting “certain types of flash sales.” In addition, the company may need to hire a 24/7 compliance director and complaints director, who must be based in India.

According to the Indian government, the move was made after sellers, consumers and associations repeatedly complained about unfair business practices and fraud in the Indian e-commerce ecosystem. Platforms such as Amazon and Flipkart support a large number of flash sales during festivals such as Diwali and Independence Day. Therefore, according to the new law, the law prohibits these platforms from making such flash sales in China.

“Certain e-commerce entities are engaging in limiting consumer choice by indulging in ‘back to back’ or ‘flash’ sales wherein one seller selling on [the] platform does not carry any inventory or order fulfillment capability but merely places a ‘flash or back to back’ order with another seller controlled by the platform. This prevents a level playing field and ultimately limits customer choice and increases prices,” said the Ministry of Consumer Affairs in an official statement.

In addition, the Ministry proposed to require e-commerce platforms to appoint a compliance officer and a residents complaint officer responsible for complying with the 2019 Consumer Protection Law and regulations, similar to the new provisions in IT standards. In 2021, social media giants such as Twitter, WhatsApp and Facebook are forced to appoint the country’s Chief Compliance Officer (CCO) for India.

The authorities recently proposed new amendments to India’s Consumer Protection Act and solicited comments or suggestions before July 6. If the proposed changes to consumer protection rules apply, e-commerce giants such as Amazon, Flipkart and other gamers will be banned from selling flash memory. So what do you think of the proposed new rules for the Indian e-commerce ecosystem? Do you think they will curb bad business practices and help small businesses? Let us know in the comments.

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