Digital ecosystem needs a regulatory rethink

Such broad definitions will create confusion, and do extra hurt than promote transparency, entry and supply of products and providers by way of digital platforms.

By Kamal Taneja & Anil Taneja

The IT Guidelines for regulating the social media, Advisory Council for Open Community for Digital Commerce, draft Client Safety (E-Commerce) Guidelines 2021 and measures to curb ‘digital monopolies’ can form ‘digital markets’ and set a pattern for his or her regulation.

‘Digital platforms’ have helped create new enterprise alternatives throughout sectors and catalysed social growth. Countrywide, there are a couple of thousand digital platforms operated by SMEs and a few giant ones run by large corporates. The bigger gamers normally set industrial situations in a monopolistic method and act as a gateway for companies to achieve their prospects (large tech gamers like Google, Fb, Twitter, Amazon, Jio and others fall below this class).

Whereas this might not be a fascinating end result, the broad-based strategy for the regulation of digital platforms and providers together with e-commerce will complicate issues for digital providers. Let’s take definitions referring to ‘e-commerce entity’, ‘market place e-commerce entity’ and scope & purposes as supplied within the proposed e-commerce Guidelines 2021. These definitions cowl all doable financial sectors and entities like banks, capital markets, academia, well being, IT providers and even these auctioning commodities like tea and telecom spectrum. Such entities and their actions would get labeled below e-commerce, and will probably be incumbent on them to observe Rules of Client Safety Act.

Such broad definitions will create confusion, and do extra hurt than promote transparency, entry and supply of products and providers by way of digital platforms. The proposed e-commerce Guidelines will deal with each entity (Amazon, Jio Mart, Flipkart, Zomato, stationary, sneakers, flower & confectionary retailers and cinema tickets) on the identical footing.

The Authorities e-Market hosts about 1,000,000 sellers. Over two million SMEs, companies, artisans, weavers and craftsmen work with every of the large e-commerce corporations. The requirement referring to appointment of compliance, grievance and nodal officers to reply to grievances of shoppers inside a set interval will create hindrances for such SMEs and particular person entrepreneurs because the delay invitations penalties. Opposite to goals, the strategy of the federal government will make sure that solely corporations working giant digital platforms can adjust to such laws. It’ll inadvertently create monopolies.

Separate legal guidelines and regulators deal with unfair commerce and antitrust practices. There’s nothing to be gained by offering for such free provisions in shopper safety Guidelines significantly when the underlying laws (the Client Act on this case) is weak in such facets of legislation. Client courts have loads of pending instances pertaining to giant corporations, and the latter additionally delay aid to shoppers by preferring appeals in greater courts.

If all stakeholders, buying and selling by way of digital or non-digital means, are to retain their proper to financial freedom and entrepreneurial exercise primarily based on honest non-discriminatory ideas, then harmonisation of authorized frameworks for the 2 modes of companies is required. This can scale back confusion, improve authorized certainty of companies and engender enterprise confidence. The dualism between digital and non-digital conduct is synthetic, although digital transactions have some distinct options. An entire new set of laws for the digital sector might result in unexpected authorized problems.

Thus, previous to organising a framework to control digital markets, will probably be prudent on the a part of the federal government to deliver out a ‘digital technique’ on the ‘strategy to control digital markets’. The coverage have to be proportionate and interoperable, reflecting regulatory health with respect to home and cross-border commerce; sustaining parity in digital and non-digital enterprise have to be the core precept. A forward-looking digital technique, taking cognisance of digital improvements, will drive the ecosystem and likewise profit each part of the society.

Authors are college students of Berkley Regulation College and Harvard Enterprise College, respectively