While online marketplaces are experiencing growth and accelerated adoption, they continue to face operational complexities due to government and judicial overreach in several instances, said a report released by the E-Business Council of India (TECI), along with PwC India & Fidus Law Chambers.
The report analyses various aspects relating to intermediary liability of online marketplaces. It also focuses on those intermediaries which are online marketplaces providing e-tail and e-consumer services (including e-travel).
It notes that in addition to providing access, choice and convenience to consumers and enhancing market reach for sellers, online marketplaces are an important source of value-addition to the economy through their contribution towards employment, supply chain, exports and the promoting of digital payments.
"In the light of these benefits, it is crucial that an enabling regulatory regime is created to reduce the operational bottlenecks faced by online marketplaces," said the report titled 'Understanding Intermediary Liability for online marketplaces'.
Currently, the Information Technology Act, 2000, governs online marketplaces as intermediaries and also defines their functions.
Additionally, various other economic and sectoral regulations and policies like FDI guidelines, the consumer protection (e-commerce) rules, the legal metrology packaged commodities rules, and the trade marks Act limit the roles and responsibilities of online marketplaces to the functions that they provide, it said.
"However, despite having a distinct regulatory framework for intermediaries, it is observed that intermediaries are often penalised for the activities of their users, without the former's role being assessed or investigated adequately," it said.
The report had also made recommends for certain amendments in the IT Act in order to strengthen intermediary liability regime in India, with the objective to help create an enabling and predictable operating environment for online marketplaces.
The report focuses on those intermediaries which are online marketplaces providing e-tail, e-travel and e-consumer services.