Online Payment Market Of India And E-Commerce

Online Payment Market Of India And E-CommerceOnline payment and receipt of money is essential for the successful establishment of a digital society. In a digital economy payments are managed in an online environment with minimum human interaction. At the same time digital currency management requires compliance with certain techno legal requirements that include compliance with cyber law, e-commerce law, foreign exchange management and export and import regulations. An online payment platform is also required to be made secure from cyber attacks and cyber crimes that are very common these days.

Take the example of the recent Bangladesh bank cyber heist that costed the bank great amount of money. While Bangladesh is blaming the SWIFT for this loss yet SWIFT has pointed that this happened due to inadequate cyber security on the part of the bank. Only a detailed cyber forensics and cyber crime investigation report can ascertain the truth in this regard.

Unfortunately, banks across the world are vulnerable to malware and sophisticated cyber attacks. Even Indian banks lack cyber security infrastructure and this has made them vulnerable to sophisticated cyber attacks. Additionally zero day vulnerabilities are there that cannot be detected in advance in all cases. In some cases such zero day vulnerabilities are detected after many years of compromise of the computer systems. Cyber security of banks in India is not at all satisfactory and bank related cyber crimes and financial frauds are increasing in India. Even the decision of Reserve Bank of India (RBI) to establish an IT subsidiary to manage cyber security related issues of banks in India has failed to materialise. As a result the cyber security due diligence and cyber law due diligence (pdf) are not complied with by banks operating in India.

India has launched projects like Digital India and Aadhaar. These projects collect sensitive and personal information and data of the netizens and Indian citizens. Unfortunately, India has failed to enact dedicated cyber security laws, privacy laws and data protection laws (pdf) to safeguard the information and data collected from Indian citizens and people. In these circumstances, online payment companies and businesses of India must be very cautious in their online dealings and businesses in India. This is more so when the directors of Indian companies can be held liable for cyber law and cyber security related non compliances in India. As on date most of the directors are not complying with cyber law and cyber security related legal obligations.

In some cases the business model itself is legally questionable. For instance, recently a panel has been formed by the Competition Commission of India (CCI) that is studying the cashback model being used by online payment platforms, e-commerce companies and also several banks. This would include cashbacks given by online payment platforms like Paytm and Mobikwik. The CCI is ascertaining whether the cashback incentives offered by digital wallets and e-tailers on recharges, bill payments or purchase of other products constitute predatory pricing. Further, such cash backs may also violate the norms recently formulated under the FDI policy of India for e-commerce industry of India.

Online payment legal compliances in India are diverse and complicated in nature. For instance although mobile payment market in India is booming yet regulatory compliance are ignored by various stakeholders. There are handful of e-commerce players and entrepreneurs that are complying with cyber law due diligence requirements of Indian laws. The payment gateway and POS terminal services cyber law due diligence In India is also ignored by businesses and entrepreneurs.

Mobile cyber security in India is another area of concern. We at Perry4Law Organisation (P4LO) believe that the biggest hurdles before the mobile related uses in India pertain to use of weak encryption standards and non use of mobile cyber security mechanisms in India. Absence of encryption laws in India has further made the mobile security very weak in India. The ever evolving mobile malware are further increasing the woes of mobile users’ world wide. As on date the malware are defeating cyber security products and services with ease.

It would be relevant to mention that cyber security issues of e-commerce business in India must be managed by both e-commerce entrepreneurs and Indian government. For instance, healthcare related e-commerce platforms and businesses need to make their cyber security infrastructure robust and resilient. Similarly telemedicine and online pharmacies must also comply with techno legal regulations along with making their websites cyber secure. Use of crypto currency like Bitcoin is another area that needs regulatory clarification from RBI and Indian government.

If Indian government really wants Digital India and online payment system to be successful, it must think out of the box and use novel methods that are techno legal in nature. Similarly, businesses houses and entrepreneurs dealing with financial business ventures in general and online payment system in particular must comply with techno legal requirements of Indian laws. Perry4Law Law Firm wishes all the best to Indian government and online payment entrepreneurs for their initiatives, ventures and projects.

Foreign Direct Investment (FDI) In E-Commerce Sector Of India 2016 Series

Techno Legal Initiatives Of Perry4Law And PTLBE-commerce has generated tremendous interest among various stakeholders and entrepreneurs in India. Indian government is also interested in helping the e-commerce entrepreneurs and stakeholders in having a trouble free environment. Indian government is also committed to protect the socio economic interests of India. As a result the government is bringing policy reforms but in a bit by bit fashion. However, policy clarity, especially a good techno legal framework, in India is still missing. Nevertheless, foreign direct investment (FDI) aspects of e-commerce are witnessing consolidation and are frequently clarified by Indian government.

As per the FDI policy, contained in the “Consolidated FDI Policy Circular 2015” (pdf) (FDI Policy) as amended from time to time, FDI up to 100% under automatic route is permitted in Business to Business (B2B) e-commerce. No FDI is permitted in Business to Consumer (B2C) e-commerce. However, FDI in B2C e-commerce is permitted in following circumstances:

i) A manufacturer is permitted to sell its products manufactured in India through e-commerce retail.

ii) A single brand retail trading entity operating through brick and mortar stores, is permitted to undertake retail trading through e-commerce.

iii) An Indian manufacturer is permitted to sell its own single brand products through e-commerce retail. Indian manufacturer would be the investee company, which is the owner of the Indian brand and which manufactures in India, in terms of value, at least 70% of its products in house, and sources, at most 30% from Indian manufacturers.

2.0 In order to provide clarity to the extant policy, guidelines for foreign direct investment on e-commerce sector have been formulated and are enumerated below:

2.1 Definitions:

i) E-commerce- E-commerce means buying and selling of goods and services including digital products over digital & electronic network.

ii) E-commerce entity– E-commerce entity means a company incorporated under the Companies Act 1956 or the Companies Act 2013 or a foreign company covered under section 2 (42) of the Companies Act, 2013 or an office, branch or agency in India as provided in section 2 (v) (iii) of FEMA 1999, owned or controlled by a person resident outside India and conducting the e-commerce business.

iii) Inventory based model of e-commerce– Inventory based model of e-commerce means an e-commerce activity where inventory of goods and services is owned by e-commerce entity and is sold to the consumers directly.

iv) Marketplace based model of e-commerce– Marketplace based model of e-commerce means providing of an information technology platform by an e-commerce entity on a digital & electronic network to act as a facilitator between buyer and seller.

2.2 Guidelines for Foreign Direct Investment on e-commerce sector:

i) 100% FDI under automatic route is permitted in marketplace model of e-commerce.

ii) FDI is not permitted in inventory based model of e-commerce.

2.3 Other Conditions:

i) Digital & electronic network will include network of computers, television channels and any other internet application used in automated manner such as web pages, extranets, mobiles etc.

ii) Marketplace e-commerce entity will be permitted to enter into transactions with sellers registered on its platform on B2B basis.

iii) E-commerce marketplace may provide support services to sellers in respect of warehousing, logistics, order fulfillment, call centre, payment collection and other services.

iv) E-commerce entity providing a marketplace will not exercise ownership over the inventory i.e. goods purported to be sold. Such an ownership over the inventory will render the business into inventory based model.

v) An e-commerce entity will not permit more than 25% of the sales affected through its marketplace from one vendor or their group companies.

vi) In marketplace model goods/services made available for sale electronically on website should clearly provide name, address and other contact details of the seller. Post sales, delivery of goods to the customers and customer satisfaction will be responsibility of the seller.

vii) In marketplace model, payments for sale may be facilitated by the e-commerce entity in conformity with the guidelines of the Reserve Bank of India.

viii) In marketplace model, any warrantee/ guarantee of goods and services sold will be responsibility of the seller.

ix) E-commerce entities providing marketplace will not directly or indirectly influence the sale price of goods or services and shall maintain level playing field.

x) Guidelines on cash and carry wholesale trading as given in para of the FDI Policy (pdf) will apply on B2B e-commerce.

3.0 Subject to the conditions of FDI policy on services sector and applicable laws/regulations, security and other conditionalities, sale of services through e-commerce will be under automatic route.

4.0 The above decision will take immediate effect.

Related Documents:

(1) Consolidated FDI Policy Circular Of 2015 By DIPP (pdf)

(2) Guidelines For Foreign Direct Investment (FDI) On E-Commerce 2016 Series (pdf)

(3) Review Of Foreign Direct Investment (FDI) Policy On Insurance Sector 2016 (pdf)

(4) Review Of Foreign Direct Investment (FDI) Policy On Pension Sector 2016 (pdf)

Software For Calculating E-Commerce Exports Developed By Indian Government

Software For Calculating E-Commerce Exports Developed By Indian GovernmentIndian government has been streamlining e-commerce and activities related to the same for the past one year. Initially an e-commerce friendly foreign direct investment policy was formulated by Indian government. The same may be accessed at Consolidated FDI Policy Circular Of 2015 By DIPP (pdf). Then guidelines were issued to further clarify the e-commerce related business activities in India. The same can be accessed at Guidelines For Foreign Direct Investment (FDI) On E-Commerce 2016 Series (pdf).

Now Indian government is testing a software that intends to capture crucial data related to export of e-commerce related goods and services in India. Indian government has already indicated that it would impose tax on online transactions happening in India for certain cases. For instance, according to the Budget announcement, any person or entity that makes a payment exceeding Rs 1 lakh in a financial year to a non-resident technology company will now need to withhold 6% tax on the gross amount being paid as an equalisation levy.

The said rule is applicable when the payment is made to companies that don’t have a permanent establishment in India. This tax, however, is only applicable when the payment has been made to avail certain B2B services from these technology companies. Specified services include online and digital advertising or any other services for using the digital advertising space. This list, however, may be expanded soon.

Indian government now plans to tap data on overseas online sales as part of efforts to boost outbound shipments through e-commerce platforms and channel benefits to these dedicated exporters. Indian government has made a software for e-commerce exports that would capture data for further action and policy decisions. This would benefit small exporters as customised solutions can be then provided to them by Indian government. Presently the value of items shipped through couriers is often not captured in export data because they are categorised as samples or gifts. These are labelled as samples because under the normal export channel exporters have to file shipping bills and are subject to checks by custom officials, which is cumbersome, especially for small exporters with low-value shipments. The software intends to mitigate these rigours and further help in claiming duty drawbacks for e-commerce exports. To give benefits to small exporters, the director general of Foreign Trade has defined “e-commerce” as the buying and selling of goods and services, including digital products, conducted over digital and electronic networks.

These steps are being introduced a year after the government provided export incentives to the shipment of goods through couriers or foreign post offices using e-commerce in the Foreign Trade Policy of 2015-2020. At present, exports that can avail of these sops are capped at Rs 25,000 per consignment, a value considered small for such purchases. Moreover, only six product categories i.e. handicrafts, handlooms, toys, customised fashion garments, books and leather footwear are entitled to these incentives under the Merchandise Exports from India Scheme (MEIS).

Maharashtra’s FDA Orders Filing Of FIRs Against Snapdeal, Its CEO Kunal Bahl, Directors And Distributors For Online Sale Of Prescription Drugs

Maharashtra’s FDA Orders Filing Of FIRs Against Snapdeal, Its CEO Kunal Bahl, Directors And Distributors For Online Sale Of Prescription DrugsIndian government has been very lax regarding regulating e-commerce functions in India. Although there is dire need for e-commerce laws in India yet Indian government has failed to address this crucial requirement. There were also some speculations that Telecom Regulatory Authority of India (TRAI) would regulate e-commerce in India.  However, till now there are no sign that Indian government would properly regulate this much needed field.

One area that is grossly neglected by Indian government pertains to regulation of online pharmacies in India that are openly ignoring the regulatory compliances in India. We at Perry4Law believe that online pharmacies laws are urgently needed in India. Even there is no synergy between Digital India, online pharmacies and healthcare laws of India.

A dominant majority of the online pharmacies functioning in India are being run in an illegal and unregulated manner. Many of such online pharmacies are already under regulatory scanner. FDA Maharashtra has recently raided 27 online pharmacies located in Mumbai. Maharashtra FDA has also approached DCGI for regulating illegal online pharmacies operating in India. Surprisingly, many online pharmacies websites in India are controlled by underworld and organised criminal networks. We at Perry4Law have been consistently suggesting that illegal online pharmacies and healthcare websites in India need to be curbed urgently.

In a recent move, the Maharashtra’s Food and Drug Administration (FDA) has ordered filing of FIRs against as well as against its CEO Kunal Bahl, directors and distributors for online sale of prescription drugs in derogation of Indian laws. FDA Commissioner Harshadeep Kamble said investigations into other e-commerce giants like Flipkart and Amazon are also under progress to ascertain if they are also involved in such sales. As on date most of the e-commerce portals are selling prescribed drugs in an illegal and unauthorised manner.

Meanwhile Snapdeal has claimed that it is assisting the FDA team in this investigation. Snapdeal has also informed that it has already delisted the products and said sellers and also stopped payment. However, this does not absolve Snapdeal of its legal obligations and liabilities under various healthcare laws of India. Further, Snapdeal has also failed to observe cyber law due diligence (PDF) that is very common in India these days.

“Jasper Infotech Pvt Ltd, through offered for sale, exhibited for sale Vigora Tablets 100, a drug containing Sildenafil citrate, to be sold on the prescription of a registered medical practitioner – specialist endocrinologist, venerologist, psychiatrist, dermatologist,” Kamble said. The drug was sold by “Mittal Pharma, Kota, Rajasthan, a seller in agreement with Jasper Ascoril Expectorant”, without prescription, he said. “The drug was also sold by Rishabh Enterprises, New Delhi, a seller in agreement with Jasper, to a customer Amrut Bhagat of Panvel in Maharashtra’s Raigad district through a courier in agreement with Jasper, who collected the cost of drug for Jasper,” he said. The officer said Jasper Infotech through exhibited and offered for sale UNWANTED-72 sold by Horizon Medicals, Bangalore, and I-pill, sold by Giriraj Pharmacy in Gujarat’s Gandhinagar, sellers in agreement with Jasper.

FDA has filed an FIR against the persons concerned with Panvel police station, he said. FDA has also sent letters to State Drugs Controllers for action against the concerned people in their states, Kamble said. The contraventions include sale of drug without licence – Sections 18 (c), 18A, rw rules 65 (3), 65(11), 65(17) punishable under Section 27(b)(ii), 27(d) of Drugs and Cosmetics Act, 1940; and Sections 3 and 4 of Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954. If proven guilty, the offence carries imprisonment of 3 to 5 years with fine of not less than Rs 1 lakh, he added.

A special investigation team was formed to look into the issue of violation by Snapdeal, Kamble added. The godowns of the company were searched on April 16 and 20, he added. It was revealed that Jasper Infotech entered into agreements with different dealers of medicines located all over India to supply the medicines offered/exhibited for sale on and to collect the sale proceeds by Snapdeal on their behalf, the officer said. It was found that the e-commerce major displayed and offered for sale about 45 drugs with objectionable claims which contravenes the provisions of Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954.

“Despite written commitment, it was found that Snapdeal continued to offer, exhibit for sale and sale of drugs, namely, I-pill and ‘Unwanted 72′, emergency contraceptive drugs, through its website,” he said. Kamble said he had asked the FDA team to purchase the drugs online and accordingly drugs I-pill and Unwanted 72 were received on April 24. “Only a licensed retailer can offer for the sale of Schedule H drugs, and that too only on the basis of prescription of doctor. Such type of online sale of drugs is not allowed as per the Act,” the FDA chief said.

Online Pharmacies Laws Are Urgently Needed In India: Perry4Law

Online Pharmacies Laws Are Urgently Needed In India Perry4LawOnline pharmacies are double edge swords. On the one hand they are beneficial to the masses as they provide easy and affordable medicines to the patients and those who are in need of them. On the other hand they are potential source of spurious and dangerous substances passed as medicines that could prove fatal in many cases.

Recently Indian government has launched technology driven projects and initiatives like Digital India, Internet of Things (IoT) (PDF), etc. The aim of Indian government is to utilise the benefits of technology to render various services to Indian population. Healthcare is one of the segments that have been targeted by these projects.

However, projects like Digital India are suffering from many shortcomings and this has made the Digital India project vulnerable to judicial interventions. Just like the Supreme Court of India had to interfere in the Aadhaar and section 66A cases, the Supreme Court of India may also have to interfere with the implementation of Digital India project.

This is because the digital India project is not supported by a well drafted and analysed plan and policy decision of Indian government. Further, Digital India is also relying upon illegal and problematic platforms and technology like Aadhaar itself that makes the Digital India project itself vulnerable to judicial attacks.

So from the present position one can easily deduce that there is no correlation and synergy between Digital India and the healthcare initiatives of Indian government. The healthcare laws of India are simply outdated, irrelevant and ill suited to meet the objective of Digital India. Fields like e-health, m-health, telemedicine, etc require dedicated techno legal framework that is missing in India. As a result, healthcare industry and healthcare entrepreneurs of India are presently acting more on the side of violation than compliances.

At Perry4Law we strongly recommend that online pharmacies must be suitably regulated in India for the larger benefit of Indian population. So bad is the situation that many online pharmacies in India are controlled by underworld and organised criminal networks. It is very important to sort out illegal online pharmacies from those that are operating within the parameters of Indian laws.

Similarly, online pharmacies operating in India must conduct a proper cyber law due diligence (PDF) exercise to make it sure that they are on the right side of the law. As on date most of the online pharmacies operating form India are not complying with the techno legal requirement as prescribed by Indian laws. It is for Indian government to punish such illegal online pharmacies so that health hazards can be prevented at the earliest stages.

Resolve E-Commerce Disputes In India Through ODR

Resolve E-Commerce Disputes In India Through ODRE-commerce has introduced significant choices for Indian consumers and customers. However, e-commerce in India has also given rise to many disputes by the consumers purchasing the products from e-commerce websites.

There is no formal e-commerce dispute resolution regulatory mechanism in India as we have no dedicated e-commerce laws in India. In fact, many e-commerce websites are not following Indian laws at all and they are also not very fair while dealing with their consumers. Allegations of predatory pricing, tax avoidance, anti competitive practices, etc have been leveled against big e-commerce players of India.

As a result, disputes are common in India that are not satisfactorily redressed. This reduces the confidence in the e-commerce segment and the unsatisfied consumers have little choice against the big e-commerce players. At a time when we are moving toward global norms for e-commerce business activities, the present e-commerce environment of India needs fine tuning and regulatory scrutiny. In fact, India is exploring the possibility of regulation of e-commerce through either Telecom Regulatory Authority of India (TRAI) or through different Ministries/Departments of Central Government in a collective manner.

It is obvious that e-commerce related issues are not easy to manage. E-commerce disputes resolution is even more difficult and challenging especially when Indian Courts are already overburdened with court cases. Of course, establishment of e-courts in India and use of online dispute resolution (ODR) in India are very viable and convincing options before the Indian Government.

To make ODR a success in India, Techno Legal Centre of Excellence for Online Dispute Resolution (ODR) in India (TLCEODRI) has been providing its techno legal ODR services to national and international stakeholders. TLCEODRI has now decided to manage e-commerce disputes resolution in India through its techno legal ODR platform. To implement this initiative in a smooth manner, an ODR Discussion Forum has been started by TLCEODRI.

We have also started a dedicated Board/Thread at the ODR Discussion Forum for E-Commerce Dispute resolution In India through ODR (registration required). This is a good opportunity for e-commerce websites of India and abroad to get good techno legal insight about Indian laws and their implementation to e-commerce field.

The access and registration to this Board is allowed to e-commerce websites alone that have already been established and are operating in India. Our existing e-commerce clients and other clients can contact us for immediate activation of their accounts while the registration request of other e-commerce websites would be duly approved/disapproved by our moderators/administrators.  If an e-commerce websites is engaging us for our techno legal services, it would be granted immediate access to this segment at its request.

Very soon we would introduce additional features for e-commerce companies and online consumers. This would also include online filing of complaints and grievance by the consumers and other aggrieved individuals/companies against the e-commerce companies of India and abroad. Such complaints and grievances would be openly available for public access to general public, regulatory authorities and other e-commerce stakeholders.

We would also introduce a system where grievance can be managed by the e-commerce companies/websites and their consumers through multiple dispute resolution processes and stages of TLCEODRI. This would include conciliation, mediation and arbitration through ODR mechanisms. Please check our ODR Discussion Forum for regular updates about the ODR services of TLCEODRI.

Will TRAI Regulate E-Commerce In India?

Will TRAI Regulate E-Commerce In IndiaE-commerce has really flourished in India but there is no dedicated e-commerce law in India till date. We at Perry4Law Organisation (P4LO) believe that e-commerce laws in India are urgently needed. We also recommended that India should regulate taxation, anti competitive practices and predatory pricing of Indian and foreign e-commerce websites. We have also discussed about cyber security issues of e-commerce business in India.

Meanwhile, United States is seeking trade rules at WTO for e-commerce and cloud computing. There are also some hints that foreign companies and e-commerce portals would be required to register in India and comply with Indian laws.

Many Indian stakeholders have raised objections about the way e-commerce websites are operating in India. These websites are providing deep discounts that have been labelled as predatory pricing by offline traders and businesses. Further, Myntra, Flipkart, Amazon, Uber, etc have already been questioned by the regulatory authorities of India for violating Indian laws.

A techno legal framework is long due and Indian Government has failed to provide the same so far. There is no doubt that e-commerce websites must be suitably regulated by Indian Government. However, the question is who would regulate and monitor e-commerce activities in India?

According to Business Standard, an inter-ministerial panel has requested the Telecom Regulatory Authority of India (TRAI) to take up the role of e-commerce regulator in India or suggest if there is a need for a separate regulator for e-commerce. At present, TRAI regulates telecommunications, media and broadcasting industries.

The inter-ministerial panel will prepare a paper on imposing restrictions on the location of servers and on getting companies like Google and Amazon to set up data centres in India. Similarly, Internet telephony and VOIP service providers are already under pressure to establish their servers in India. The telecom related trends and development in India 2014 by P4LO have also outlines server location related issues for India.

The panel has also sought an update from the consumer affairs ministry on measures taken to introduce online dispute resolution in e-commerce. P4LO has been recommending use of online dispute resolution (ODR) in India for long. ODR can be used for resolving corporate disputes, certain civil disputes, e-commerce disputes, cross border technology transactions disputes, cross border business disputes, etc.

US Seeks Trade Rules At WTO For E-Commerce And Cloud Computing

US Seeks Trade Rules At WTO For E-Commerce And Cloud ComputingThe General Agreement on Trade in Services (GATS) may be discussed once again at the World Trade Organization (WTO) level. This is partly due to the fact that information and communication technology (ICT) has changed the way services are delivered today in a cross border environment. This is also due to the reason that United States (U.S.) is planning to use the WTO platform for securing strong trade rules for the electronic commerce and cloud computing industry. Both of these industries are dominantly controlled by U.S. based companies and this would definitely help U.S and its technology companies.

This proposition of U.S. is troublesome and not acceptable to many nations of the world. Even India would not be happy with this arrangement especially at a time when India is reviving her electronic industry.

India has already justified its preferential market access (PMA) policy for domestic telecom equipments manufacturers. India has also formulated the merger and acquisitions (M&A) policy and guidelines 2014 for telecom sector of India. Similarly, electronic system design and manufacturing (ESDM) policy and regulations in India 2014 have also been enacted by India.

On the other hand, U.S. is planning to spearhead a robust work programme to frame trade rules to allow cross-border information flows, remove localization requirements for protecting personal data within national borders, and agree to a proper coverage of cloud computing as part of computer and related services. Regulations in some countries consider cloud computing as a telecommunications service and U.S. is anxious to get a reversal notification on this issue.

U.S. is already negotiating about these fields at Trans-Pacific Partnership (TPP) regional trade liberalization talks and Trade in Services Agreement (TISA) talks with selective countries in Geneva. However, nothing can give U.S. more leverage than a binding international treaty of WTO in this regard as almost all of the countries are Member of WTO. This also means that countries like China, India, Brazil, South Africa, Indonesia and other developing countries would be forced to align their respective laws in terms of proposed agreement.

In a restricted proposal circulated at the WTO’s Council for Trade in Services last Thursday, the U.S. has expressed its intentions to facilitate e-commerce, an area in which WTO members have remained unsuccessful in arriving at an agreement since 1998. The U.S. wants complete freedom for cross-border information flows. It says “governments should not prevent services suppliers of other countries or customers of those suppliers, from electronically transferring information internally or across borders, accessing publicly available information, or accessing their own information stored in other countries”.

More importantly, governments should not insist that “ICT service suppliers use local infrastructure, or establish a local presence, as a condition of supplying services”. Further, governments must not give priority or preferential treatment to national suppliers of ICT services in the use of local infrastructure, national spectrum or orbital resources. As far as India is concerned, all these issue are bound to be agitated against and rejected by her as they are in conflict with existing policies of India in this regard.

We at Perry4Law and Perry4Law’s Techno Legal Base (PTLB) believe that this proposal of U.S. must also to be tested on the front of civil liberties protection in cyberspace, privacy and data protection (PDF), conflict of laws in cyberspace and many more techno legal issues as well.

E-Books Laws In India

E-Books Laws In IndiaThe Digital India project by Indian government has short listed areas like education, judiciary, healthcare, etc to be taken up for development and implementation. All these fields would be strengthened by using information and communication technologies (ICT) for effective and transparent delivery of public services in India.  For instance, India would strengthen and rejuvenate Indian Judiciary by trying to establish e-courts under the Digital India project. Unfortunately, the e-courts project of India has recently face a major setback when the e-committee refused to record proceeding in courts in electronic manner.

On the positive side, the e-books project of Indian government under the Digital India project has shown some affirmative developments. Digitisation of books is also undergoing in some of the libraries of India. We have a national digital preservation policy of India that can be helpful in the digitisation drive in general and digital preservation in India in particular.

However, while performing the digitisation of traditional books and other academic materials, Indian government must keep in mind the legal mandates of Public records Act, 1993 and Information Technology Act, 2000. Similarly, there are certain legal requirements while converting, selling, distributing, uploading and making available e-books to the end users. This is more so where international users are involved as that would require compliance with laws of multiple jurisdictions.

Needless to mention, e-commerce laws of India would also be required to be followed by various stakeholders where commercial interests are involved. For instance, if an e-commerce website is selling e-books to international end users there are complicated set of laws that are applicable in such circumstances.

Further, conflict of laws in cyberspace has added its own set of problems while dealing with e-books at international and national levels. Intellectual property rights protection at the international level is really tedious when Internet and cyberspace is involved. Even a simple demand for basic electronic details of the accused offender may take months to materialise when foreign technology companies are involved.

In the international market, regulations of and litigation in the field of books publication and e-books are fast increasing. For instance, Apple was fined in Beijing court for unauthorised e-books sale. Similarly, publishers entered into a settlement with European Union for e-books price fixation. The Penguin Group also settled an e-book price escalation lawsuit recently. Amazon has also settled its dispute with Hachette recently involving e-books.

As far as India is concerned, e-commerce players like Amazon, Flipkart, etc are already engaged in selling of e-books in India. However, predatory pricing and taxation issues are still not clear in India. In fact, the Federation of Publishers’ and Booksellers’ Associations in India (FPBAI) has questioned the predatory pricing tactics adopted by Indian e-commerce players selling the books. There would be much more disputes and controversies when e-books would be involved as there is no settled law in India in this regard.

There is also great chances that the terms and conditions and other legal documents of various e-commerce players are not drafted as per Indian laws and this would create legal problems to parties dealing with the website.  In some cases these legal documents may be drafted in an anti competitive manner and may also be detrimental to the interests of the consumers. Indian government is planning to amend the consumer protection law of India to protect consumers’ rights in the e-commerce era.

At Perry4Law we have been dealing with publishing industry related legal issues in general and e-books related international and national legal issues in particular. From our experience we can just say that conversion and selling of e-books is not an easy task and these activities require techno legal compliances on the part of various stakeholders, including Indian government.

FPBAI Questions The Predatory Pricing Tactics Of E-Commerce Websites Of India

FPBAI Questions The Predatory Pricing Tactics Of E-Commerce Websites Of IndiaThe books publication industry of India is passing through a crucial and highly competitive phase. The growing popularity of e-books and sale of paper books at e-commerce websites have changed the way books were published, distributed and sold in India so far.

In the international market, regulations of and litigation in the field of books publication and e-books are fast increasing. For instance, Apple was fined in Beijing court for unauthorised e-books sale. Similarly, publishers entered into a settlement with European Union for e-books price fixation. The Penguin Group also settled an e-book price escalation lawsuit recently.

Back in India, the books distribution and wholesale channels have been severely hit by the burgeoning e-commerce business of India. While healthy competition is always welcome and is good or the consumers yet unreasonable and unethical business practices must be curbed at the very inception.

Unfortunately, Indian e-commerce websites are operating in an unregulated manner and they need to be suitably regulated as soon as possible. E-commerce websites in India are also engaging in violation of various Indian laws including taxation laws, foreign exchange laws, consumer laws and contractual laws. E-commerce websites in India are also engaging in predatory pricing thereby pushing the small business houses and businessmen out of business.

Books publishers in India have now decided to seek policy as well as legal intervention against the predatory pricing tactics of Indian e-commerce websites. The Federation of Publishers’ and Booksellers’ Associations in India (FPBAI) had recently written to Prime Minister Narendra Modi and the Ministries of Finance, Commerce, and Human Resource Development, complaining about the “questionable trade practices” adopted by e-commerce websites like Flipkart and Amazon. In fact, Myntra, Flipkart, Amazon, Uber, etc have already been questioned by the regulatory authorities of India for violating Indian laws.

S. Chand, a well-known publisher of text books, had also served a legal notice to Flipkart six months ago, accusing it of modifying discount structures, violating the clause, and retailing only their fast-selling titles. S. Chand has also snapped all ties with Flipkart and stopped providing its books to FlipKart since then. However, Flipkart continues to sell S. Chand’s books by sourcing them from wholesalers.

The FPBAI letter also seeks action to protect the publishing trade. E-commerce websites are purchasing books at lower discounts from publishers and distributors and sell the same at higher discounts, making a loss in each transaction. It is indeed a questionable activity as it smacks of the act of predatory pricing. In fact, bookstores such as Capital Book Depot in Chandigarh, Teksons and New Book Depot in Delhi have already shut their shops and many others are struggling for survival due to predatory pricing activities of e-commerce websites in India.

There is an urgent need on the part of Indian government to step in and come out with a dedicated e-commerce law of India to regulate the e-commerce activities in best possible manner. A techno legal framework is long due and Indian government has failed to provide the same so far.