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  • FHRAI SUBMITS CURATED LIST OF SUGGESTIONS TO THE MINISTRY OF CONSUMER AFFAIRS TO PROTECT RIGHTS OF BUSINESSES & CONSUMERS

News Details

28 th Jul 2021

To define OTAs, FSAs, Table Reservation Services and Ticketing Platforms as ‘Market place E-commerce entities’

 

- Fall back liability – It’s the liability of a marketplace e-commerce entity if a seller registered with such entity fails to deliver the goods or services ordered by a consumer due to negligence, omission, etc.

 

-Address issues faced by consumers with marketplace e-commerce entities - Problems of overbooking, inability of OTAs or FSAs to service customers, double dipping by levying hidden charges as Convenience fees, Service charges (not levied by the business), Delivery charges, Packaging charges (not levied by the business), Transaction fees (to offset credit card commission), Tips (supposed to be paid to their Riders), Donations (supposed to be collected for different charities)

 

-Safeguard a hotel or restaurant operator from unfair trade practices-Unilateral marketing offers/discounts that include discounts, cashbacks, promotions and schemes which may be in dissonance with the agreement between the OTA and the hotel or restaurant owner, hosting illegal and unauthorized accommodations on portals which poses a threat to consumer safety, ranking, rating and guest reviews controlled by OTAs and FSAs, delay in food service delivery due to the inefficiency of e-commerce entity or market place e-commerce entity

 

India’s apex Hospitality Association - Federation of Hotel & Restaurant Associations of India (FHRAI) has shared its suggestions on the proposed amendments to Consumer Protection (e-Commerce) Rules, 2020 to the office of the Joint Secretary of the Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution - Shri Anupam Mishra. Highlighting the various issues based on past experiences with e-commerce and marketplace e-commerce entities, FHRAI’s suggestions aim to cover the duties and responsibilities of sellers, of e-commerce entities as well as to protect the consumer and hotels and restaurants owners in case of deficiency in services.

 

“The Hospitality industry has been severely affected by unfair trade practices carried out by some of the e-commerce entities and FHRAI has been trying to find options to resolve the issues at various levels. In the recent past, widespread cheating and unfair trade practices have been observed in the e-Commerce ecosystem by the hospitality industry as well as by consumers. Keeping this in view, we request the Ministry of Consumer Affairs to amend the policies that will help in redressing such grievances and protect the interest of consumers. Besides, it will bring transparency to the e-Commerce ecosystem and further strengthen the regulatory. Our detailed recommendations relating to the Consumer Protection (E-Commerce) Rules not only protect the rights of our patrons but also safeguard hotels and restaurant owners. The suggestions include Fall back liability to ensure marketplace e-commerce entities act responsibly, to host legitimate accommodations based on local and central licenses and fees paid, no indulgence in overbooking of goods or services, scheme or discounts to be offered with the consent of the seller, transparency in charges levied to the customers, duties of sellers on marketplace among others,” says Mr Gurbaxish Singh Kohli, Vice President, FHRAI.

 

The Association has pointed out that an e-commerce entity provides an information technology platform on a digital or electronic network to facilitate transactions between buyers and sellers and hence Online Travel Agency (OTA), Food Service Aggregators (FSA), Table Reservation Services, Event Ticketing Platforms and such entities should be listed under the market place e-commerce entity to avoid any disputes.

 

“On the one hand in the name of discounts and schemes, these e-commerce or marketplace e-commerce entities carry unfair trade practices with hotels and restaurants and on the other hand, these entities levy illicit charges to customers such as service charges, delivery charges, and packaging charges, among others. They even bill customers, transaction fees to offset credit card commissions and tips to be paid to their riders. Surge pricing is another critical issue that was stopped for app-based cab operators, however, it is continued to be practiced by the FSAs. Other than this, on busy days when the FSAs are unable to service customers, instead of informing customers about their inability to provide the service, they choose to display the restaurant as unavailable. The restaurant, unfortunately, has no knowledge of this and the customer is misled into believing that the restaurant is closed for the day, which again is an unfair trade practice. On certain occasions we have dealt with complaints related to mishandling of packaged food or delay in food delivery due to deficiency in ridership services and in such cases sellers should not be made liable under the Act if the deficiency is on the part of the e-commerce entity or market place e-commerce entity. We request the Ministry to favourably consider the suggestions of the hospitality industry and amend the Consumer Protection (e-Commerce) Rules, 2020 for ensuring the rights and privileges of all stakeholders,” concludes Mr Pradeep Shetty, Jt. Hon. Sec., FHRAI.

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