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Business News/ Politics / Policy/  Mandatory anti-fake review rules for e-commerce firms soon, meet to decide contours of rulebook tomorrow
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Mandatory anti-fake review rules for e-commerce firms soon, meet to decide contours of rulebook tomorrow

The government initiative follows the failure of a voluntary mechanism, implemented a year ago, to curb fake reviews.

A voluntary mechanism had prohibited platforms from publishing paid reviews, and required disclosure of promotional content. (Mint)Premium
A voluntary mechanism had prohibited platforms from publishing paid reviews, and required disclosure of promotional content. (Mint)

New Delhi: E-commerce platforms will soon be held to stricter standards for consumer reviews, with the consumer affairs ministry planning to crack down on fake feedback, a top government official said. 

The government initiative follows the failure of a voluntary mechanism, implemented a year ago, to curb fake reviews. A meeting is scheduled for 15 May to finalize the guidelines, the official added.

The mechanism had prohibited platforms from publishing paid reviews, and required disclosure of promotional content, but complaints about substandard products have been on the rise, indicating that e-commerce platforms were not following the rulebook. 

After reviewing all such complaints, the Department of Consumer Affairs (DoCA) concluded that mandatory regulations were required to curb fake reviews, considering that consumers were at risk of being fleeced, the official said.

‘Fake reviews still being published’

"The voluntary standard on online reviews was notified a year ago. However, fake reviews are still being published, despite some e-commerce players claiming that they were complying with it," consumer affairs secretary Nidhi Khare said.

Representatives of most e-commerce firms are expected to attend the meeting to participate in the discussions, Khare said. The government wants to make these standards mandatory to protect consumer interests, she added.

Also Read: Has e-commerce peaked?

The Bureau of Indian Standards (BIS), which operates under the consumer affairs ministry, released the standards for online consumer reviews in November 2022, which prohibited paid reviews and those authored by individuals hired for the purpose either by the supplier or a third party.

With the growth in ecommerce services, consumers typically rely on online reviews for buying decisions with little chance for hands-on inspection. But misleading reviews can lead to purchases based on false information.

According to India Brand Equity Foundation (IBEF), a commerce ministry organisation, the Indian e-commerce industry is expected to hit $300 billion by 2030. Third-party logistics providers are projected to handle around 17 billion shipments within seven years, it added.

Also Read: Business intelligence technology and e-commerce

India's e-tailing market is projected to surpass $160 billion by 2028. In 2023, it was estimated to be valued at $57-60 billion, translating into an annual addition of $8-12 billion since 2020, the IBEF report said.

Besides, according to the report, India's online grocery sales are estimated to reach $26.93 billion in FY27 from $3.95 billion in FY21, clocking a compound annual growth rate (CAGR) of 33%. 

India's consumer digital economy is expected to become a $1 trillion market by 2030, up from $ 537.5 billion in 2020, driven by increasing adoption of online services, including e-commerce and edtech.

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Published: 13 May 2024, 10:25 PM IST
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