The promulgation of Digital Commerce Operation Guidelines 2021 (Guideline) by the Ministry of Commerce is surely a milestone for thriving operational governance of the digital commerce (popularly known as ‘e-commerce’) sector in Bangladesh and at the same time, its proper implementation is also crucial.
Principally, the newly adopted regulation seems well-timed as a pro-consumer, but not anti-business regulation.
This regulation can be considered successful, once it can prove the best protection of the consumers’ interests and maintain a competitive business-friendly regulatory regime.
Currently in Bangladesh, there is no specific statutory legislation for the e-commerce sector and therefore a number of laws are being applied considering the nature of dispute on a case to case basis.
This guideline has briefly addressed a number of operational processes like purchase, delivery, payment, refund, complaint management etc. and those are interlinked with a number of legal challenges.
Only some selective legal issues corresponding to this guideline have been discussed here.
Primarily, we need to figure out the answer to a very basic question: whether an e-commerce entity can be sued under this guideline for violating any provision here?
The origin of this guideline came from the National Digital Commerce Policy 2018 which was formulated by the Ministry of Commerce being empowered under Rule 4(ix)(a) of the Rules of Business 1996.
The policy was also amended in 2020 to permit foreign entities to hold 100% ownership without having a local partner.
The policy outlined visionary targets with a plan to implement them through the short term (2021), mid-term (2030) and long term (2041) as well as the things the government does not want to make.
The policy itself is not a law but may lead to new laws in the form of statutory legislation or delegated legislation.
Therefore, as the guideline has been issued under the policy but not legislation, it is difficult to define the guideline as a law under Article 152 of our constitution.
The laws generally set standard parameters, dos and don’ts, procedures and consequences for any act or omission under which one can sue or can be sued.
In the case of e-commerce business, there is no specific statutory law and clause 3.1.1 of the guideline also states that all existing laws will be applicable for digital commerce business. Therefore, the applicability of law still remains scattered because the legal procedure for violation of any provision of this guideline will vary from case to case basis considering the nature of such violation.
For example, arranging a lottery is punishable under the Penal Code 1860, selling medicine without a license is punishable under the Pharmacy Ordinance 1976, selling fire equipment without a license is punishable under the Fire Prevention and Fire Fighting Act, 2003 etc. However, as the guideline is approved by the government but not under any statutory law, then this can be considered as an executive direction and, under clause 3.4.5 of the said guideline, the government is empowered to take necessary action against any non-compliant activity.
Data protection
Regarding customers’ data protection, the guideline also precisely outlined the necessary steps to be followed for the protection of consumers’ data.
E-commerce platforms must take prior permission from customers before taking data including personal identity information, which is also a prerequisite under section 26 of the Digital Security Act 2018.
An e-commerce platform shall also inform how the data will be preserved, utilized, and processed with detailed terms and conditions.
It has been recommended to keep an option to click on a checkbox for having customer’s consent.
Clicking on the checkbox becomes a contract under section 52 of the Contract Act 1872. This contract seems like a ‘take it or leave it’ option, but it could be more logical if the customer had the choice to customize what to share and what not.
Recently, the Bangladesh Bank (BB) issued a circular dated 30 June 2021 instructing banks, MFS, PSP (payment service providers) and others to ensure a number of conditions before releasing payment to e-commerce entities.
The PSPs will retain the advance payment of the customer to itself till having confirmation of product delivery or will fully refund the advance payment to the customer through the same channel within a specific timeline upon cancellation of the order.
This entire process is called escrow service.
For payment, an e-commerce entity will submit a list of delivered products along with customer information to the PSPs and, after being satisfied; they (PSPs) will release the payment.
Here, the PSPs will be required to fully rely on the information given by the e-commerce entity although there may be pending disputes at the end of the e-commerce entity, Directorate of National Consumer Rights Protection (DNCRP) or any other competent authority.
The purpose of the pending dispute can be frustrated if the payment is released, although there is no bar to claim payment after making delivery of the product.
Moreover, according to Clause 3(d) the Circular of BB, the PSPs will show cause to the e-commerce entity if it gets any proof of non-delivery of product and will suspend transaction if the reply of the e-commerce entity is dissatisfactory.
Here, it is unclear how the PSPs will get information about non-delivery of a product as it relies on the information of e-commerce entities and, on the other hand, suspending all transactions may cause disruption to the entire business, which may lead to interruption to other thousands of customers.
In this context, the customer himself can complain to the PSP for withholding the payment till disposal of the dispute, a penalty can be imposed if the e-commerce entity is found at fault and a Cooperation Agreement can be executed among the relevant stakeholders for proper synchronization and transparency.
Regarding offers and discounts, we are more or less familiar with some terms like Flash Sale, Black Friday, Big Sale etc. by which sellers offer attractive discounts on their products both in physical stores and virtual platforms.
For example, at the end of winter, clothing stores offer huge discounts on warm clothes, during summer electronics shops offer discounts on air-conditions and there are many more.
Worldwide, it is well accepted to offer discounts at physical and virtual platforms.
Monitoring
In Bangladesh, the government and the Competition Commission are jointly responsible for monitoring the market closely that no monopoly or oligopoly practice can be done or even no one can abuse their dominant position by cross-subsidization, price dumping, aggressive discount etc. which may ultimately disrupt healthy competition in the market.
The regulator must interfere when an e-commerce platform enables only specific seller(s) because the seller is associated with the e-commerce platform and it is discriminately facilitating the seller other than its competitors.
Offering discount is not barred under clause 3.5.2 of the guideline but the regulator should also monitor the rationality of the same with its assets, profit, purpose and prospect. Considering the importance of competition in the e-commerce sector, a comprehensive new or amended guideline can be formulated by the government in consultation with the Competition Commission and industry representatives.
Lastly, the dispute resolution mechanism is another crucial indicator to measure the success of the guideline.
We can see there are a number of avenues to deal with the disputes of the e-commerce sector. As per Clause 3.6.1 of the policy of 2018, all sorts of disputes should be dealt with the laws of digital security.
Here, the Digital Security Act 2018 and the Information and Communication Technology Act 2006 can be related to the intention of the policy.
However, clause 3.4.1 of the guideline states that the e-commerce entity shall be responsible for dealing with the complaints against itself in the first instance and will resolve them within 72 hours.
Moreover, clause 3.4.6 of the said guideline also entitles an aggrieved person to file a complaint with DNCRP and other competent courts.
Furthermore, recently, the Competition Commission has also made precedence by giving a suo moto direction upon an e-commerce platform considering their predatory offer as anticompetitive under section 15(3)(a) of the Competition Act 2012.
Having multiple windows open for remedy may cause an overlap of jurisdiction among authorities and e-commerce entities may even argue on the ground of double jeopardy for dealing with the same issue by multiple authorities.
Slowly but surely, this unsystematic regulated scenario will change to a structured operational model with the guidance of this long awaited regulation.
It can be easily presumed that the guideline is not only the beginning but also a foundation for future e-commerce business in Bangladesh.
In the coming days, we will certainly witness more regulatory instructions encouraging a business-friendly environment, attracting foreign investment and, most importantly, priority to customer interest.
The writer is an advocate at the Supreme Court of Bangladesh
