New e-commerce rules to complicate Amazon, Flipkart operations in India

The proposed changes to consumer rules for the e-commerce sector are likely to complicate operating environments for Amazon and Flipkart who are currently fight antitrust allegations in courts. The rules to ensure parties related to the e-commerce companies or their associated enterprises are not listed as sellers on their websites, could affect Amazon’s business structure as the company holds indirect stakes in two of the top sellers on its website.

The rule to ban associated brands from promoting or selling on the platform could hurt private labels, owned or licensed by companies like Amazon to certain sellers, that then market them on their online platforms. The new rules prohibit e-commerce entities from displaying or promoting misleading advertisements on its platform. These company must also, within 72 hours of receiving an order, assist government agencies for investigative or cyber security-related activities.

The new rules also propose to increase liability of e-commerce firms, which could be held liable if a consumer suffers due to a seller's negligent conduct or failure to deliver goods. They also direct e-commerce companies to set up a grievance redressal mechanism, including appointing a chief compliance officer.