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E-commerce companies might face wrath if these framework guidelines become mandatory.
If any e-commerce platform does not adhere to new guidelines and indulges in unfair trade practices, then "under the provisions of the Consumer Protection Act, the Central Consumer Protection Authority (CCPA) or a consumer court can take penal action," consumer affairs secretary Rohit Kumar Singh said, at a press conference.
"It is not a judicial order. We developed a framework and we want e-commerce entities to adopt and adhere to the standard. If an organisation wants to check if its website is adhering to the BIS standards, it can go to BIS and get it checked and certified," said Singh.
The guidelines offer ways to ‘verify a review author' through email, telephone or text message to confirm the registration, or by clicking a link, and using a captcha system to establish the genuineness, the Centre added. Disclosure is apparently an important factor and the organisations will have to be transparent about the methodology that is used to rate the products.
The Department of Consumer Affairs set up a committee in June to design a framework for reviewing fake and deceptive ratings in e-commerce platforms. Under the framework, the e-commerce companies or food delivery restaurants need to have a code of practice in place with necessary terms and conditions for accessibility. The organisation will have to monitor online reviews and ensure that the content does not have any financial information.
"For instance, if a product gets a 4-5 stars rating, the organization will have to inform the period in which the data was collected, and if an average was calculated. The framework will have provisions to protect the reviewer's identity that should not be revealed without permission," Rohit Kumar Singh said.
Furthermore, paid reviews will have to carry a mark to distinguish them from others, Singh added, "We were getting complaints that fake reviews have become a menace. The US FTC has also said that they will explore rule-making to curb fake reviews. Some countries are making rules, and some are making legal provisions, but we are the first country to make a standard. We are taking the standards route. We don't want to bulldoze the industry."
On the flip side, online companies have said that they have internal checks in place to combat fake reviews but at the moment, failure to do so is not a breach of compliance. If the framework guidelines become mandatory, companies could face action for unfair trade practices for supporting negative reviews and enabling the planting of fake reviews. We should know more details about the framework and the guidelines in the next few weeks.