To protect consumers who transact on e-commerce portals, the government is planning to regulate products and services sold on social networks such as Facebook, Instagram, Pinterest and WhatsApp under the upcoming rules.
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How Did This Happen?
They come to this decision amid increasing complaints, both on the National Consumer Helpline and other portals that track consumer grievances.
According to them, they get complaints about products sold on marketplaces attached to social networks, according to officials and people aware of the development.
Why Would They Do This?
Currently, the Ministry of Consumer Affairs is chalking up rules for consumer protection on e-commerce websites and apps.
They are thinking of including social networks under its ambit as the popularity of Facebook Marketplace, Instagram’s Shoppable Posts and WhatsApp Business is growing in India.
Sources said “there are a large number of products and services being sold on social networks. They (social networks) are facilitating sales through P2P (peer-to-peer) as well as some brands creating storefronts to sell directly to consumers,”.
“They will need to follow the same rules as other marketplaces and e-commerce websites,” they added.
One of the reasons why the government wants to regulate sales on social networks is due to higher instances of fraud being reported on such platforms.
As marketplaces on social networks are similar to other classifieds and social selling websites, their reach makes them prime targets for fraudsters.
How Does Social Media Platforms Attract Fraud?
Over 400 million people are using Instant messaging app WhatsApp in India, on the other hand, Facebook is estimated to have close to 250 million users.
In the case of Instagram, India is said to house the second largest user base anywhere in the world. ( Reference)
Although officials say that consumer protection rules will only partly solve the problem of online fraud on e-commerce and social networks.
Many online scams start on P2P selling platforms quickly move to messaging apps such as WhatsApp and Telegram, which cannot be tracked due to their encryption feature.
“We have been getting a lot of complaints regarding scams on social networks and payment apps. This can only be fully solved through education of the consumer,” said one of the officials.
He said, “the consumer protection rules will be uniform across all platforms where consumers buy goods and services online.”
What Does Trends Show So Far?
According to a poll done by the online community platform LocalCircles, 46% of respondents said they had been subject to fraudulent activity while purchasing a product or service through Facebook, Instagram, WhatsApp or other social networks.
Around 85% of participants said the social networks should be subject to e-commerce rules and policies.
As per the reports, the Ministry of Consumer Affairs had given the public and stakeholders time until December 2 to submit feedback for its Draft Consumer Protection (e-commerce) Rules.