Consumer Protection Rules To Get Stricter, E-Tailers May Need User Nod For Sharing Data: Report

In an attempt to protect customer’s privacy and prevent the unauthorised sharing of personal information, the government may come up with a new plan. As per a report, it may ask e-commerce platforms to obtain the consumer's authorization before disclosing their personal data.

The Ministry of Consumer Affairs is reportedly drafting a thorough set of guidelines for obtaining consent for data sharing. If finalised, these guidelines will be included in the Consumer Protection (E-commerce) Rules that are awaited by many stakeholders.

“Apart from the consent factor, e-commerce companies will have to adhere to the personal data protection law, which is being rewritten by the Ministry of Electronics and Information Technology,” Business Standard quoted a senior government official as saying.

As of now, there is no law in India that addresses personal data protection. However, some aspects of it have been put into perspective by regulators such as the Reserve Bank of India (RBI), through its data localisation policies for fintech companies.

According to some experts, as cited by Business Standard, customers hold the power to take action against e-commerce companies for sharing information without their consent. Hence, the companies should upgrade their technologies for asking consent as soon as possible.

“Companies will have to be ready to incur a higher cost for technology upgrade needed for this additional compliance. The government will have to check if e-commerce companies are adhering to the rule,” Business Standard quoted Atul Pandey, partner at Khaitan and Co. Pandey as saying.

In order to tighten the regulatory framework along with making e-commerce enterprises more accountable, the Ministry of Consumer Affairs also suggested new guidelines for e-commerce platforms in June last year.

The government had requested feedback from stakeholders and the deadline for submitting comments on the proposed guidelines was in August 2021. However, due to opposition from the business community and other government agencies, the updated guidelines have not yet been published.