Obligations of Marketplace E-commerce entities and Inventory E-commerce entities.

The Center has extended the deadline for seeking suggestions on the proposed e-commerce rules till July 21, 2021 according to a notification issued by Center on July 5, 2021. Earlier the Ministry of Consumer Affairs had sought feedback on the proposed amendments to the Consumer Protection (E-Commerce) Rules, 2020, till July 6, 2021.

Highlights of Duties and Liabilities of Marketplace E-commerce and Inventory E-commerce entities:

Liabilities of Marketplace E-commerce entities:

• To provide information about the country of origin, best before or use before date prominently to its users.
• The logistics service provider of a marketplace e-commerce entity shall not provide differential treatment to sellers of same category.
• To ensure that it does not use any information collected through its platform for unfair advantage of its related parties and associated enterprises.
• To ensure that none of its related parties and associated enterprises are enlisted as
sellers for sale to consumers directly.
• To not sell goods or services to any person who is registered as seller on its platform.
• To not advertise a body of sellers for the purpose of subsidizing a sale on its platform.
• If a seller registered on its platform fails to deliver the goods or services ordered by a consumer due to negligent conduct, omission or commission of any act by such seller in fulfilling the duties and liabilities in the manner as prescribed by the marketplace e-commerce entity which causes loss to the consumer, the entity shall be subject to a fall-back liability.

Liabilities of Inventory E-commerce entities:

• To provide information regarding to best use before, contractual information, payment methods, refund and exchange, total price     including other charges and ticket number to track the order and lodge complain.
• Not to misrepresent itself as consumer and post false reviews for the product.
• Not to provide any misleading advertisement
• No inventory e-commerce entity shall refuse to take back goods except for the force majeure conditions.
• To bear the liability of authenticity of a product if vouched explicitly by entity.

The table below showcases bifurcation of duties of Marketplace E-commerce and Inventory E-commerce entities as per the proposed amendments in detail:

S. No.JurisdictionNew ApplicationsExaminedPublishedRegistered

Understanding of E-commerce and its models:

As per Consumer Protection (E-commerce) rules Section 3(b) E-commerce entity means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce including any entity engaged by such person for the purpose of fulfilment of orders placed by a user on its platform and any ‘related party’ as defined under Section 2(76) of the Companies Act, 2013, but does not include a seller offering his goods or services for sale on a marketplace e-commerce entity.
As per Consumer Protection (E-commerce) rules Section 3(f) Inventory e-commerce entity means an e-commerce entity which owns the inventory of goods or services and sells such goods or services directly to the consumers and shall include single brand retailers and multi-channel single brand retailers.
As per Consumer Protection (E-commerce) rules Section 3(g) Marketplace e-commerce entity means an e-commerce entity which provides an information technology platform on a digital or electronic network to facilitate transactions between buyers and sellers.

CityPrevious WeekThis WeekPercentage of Change
Delhi2542600% Increase
Mumbai594032.2 % Decrease
Chennai14221853.52% increase
Kolkata271351.85% decrease
Total23032541.3% increase


Authored and compiled by Naika Salaria  (Junior IP Associate, BananaIP Counsels)
This post is brought to you by the E-Commerce Law and Consulting/Strategy Divisions of BananaIP Counsels, a Top IP Firm in India. If you have any questions, or need any clarifications, please write to [email protected] with the subject: eCommerce News.
Disclaimer: Please note that the news bulletin has been put together from different sources, primary and secondary, and BananaIP’s reporters may not have verified all the news published in the bulletin. You may write to [email protected] for corrections and take down.

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