E-commerce rules: Where's the evidence?

One of India's most promising sectors is in for a change, but has enough thought gone behind the new policy.

Some of life’s most valuable lessons occur to you when you least expect them. I was subject to one such lesson back in 2019. As a fresh Master’s graduate, I had started working as an intern at NITI Aayog. If you have never been to the building, the NITI Bhavan is huge, arguably iconic, and serves as an office to some of the brightest minds in the country. I remember my first day there like it was yesterday.

Starry-eyed as I made my way up to the third floor to meet my manager, I noticed that there were taps and sinks installed throughout the corridor. On top of the sinks were giant signs in caps lock, “DO NOT USE THE SINK TO WASH UTENSILS”. I chuckled to myself then, thinking how many people would have had to wash utensils in the sink to necessitate a sign being put up over every tap.

A month later, I was about to share some tea with my manager when she recommended I wash my glass. I left the room and went to the nearest tap, and began to scrub like it was the most natural thing in the world. Soon as I looked up, there was a sign shouting at me, and I realised why it made sense. People working in the building had an incentive to not use the tap for drinking water, but to wash utensils, and enough people continued to do it to necessitate a sign above every tap. This tiny event explained to me the impact of evidence-based policy-making.

The flash-sale question

This brings me to the new Consumer Protection (E-Commerce) Rules released by the Department of Consumer Affairs. The new rules were open for suggestions till July 6 (a 15- day comment period) and cover a lot of ground. For starters, the term e-commerce is doing a lot of work. In the broadest possible interpretation, the rules apply to companies like Amazon and Flipkart as well as digital goods, such as subscriptions to movies and cloud storage.

And while there are a lot of clauses in the rules that merit debate, the best example to make my point is the clampdown on ‘Flash Sales’. For context, the regulations define a flash sale as a sale organised by an e-commerce company, offering significantly reduced prices, high discounts, or any other such promotions or attractive offers for a predetermined time with an intent to draw a large number of consumers.

Broadly, that seems to be Latin for sales like Prime Day, Diwali sale etc. There are two issues I have with this. Firstly, how do you define a significantly reduced price or a high discount? A 20 per cent discount on the cost of an iPhone might be attractive to me, but not be appealing to someone else. Or a 10 per cent reduction in the price of a dishwasher may be significant to someone else, but not to me.

Secondly, and perhaps more importantly, I have been unable to connect flash sales and their (supposed) impact on consumer protection. Never have I browsed a Prime Day sale and felt like my rights as a consumer were under threat. And if the argument is that the threat to rights is unseen, then some evidence in that favour would have helped clear multiple doubts for a range of stakeholders.

As things stand, the current e-commerce rules are a far cry from the evidence-based action I was used to seeing while roaming the corridors of NITI Aayog. It is concerning that one of India’s most promising sectors is in for a change based on little presented evidence.

The writer is a policy analyst working on emerging technologies. He tweets @thesethist.

Tech-Tonic is a monthly look-in at all the happenings around the digital world, both big and small.