News reports last week suggest that the ministry of commerce and industry is in discussions to set up a specialised e-commerce regulator to enforce existing laws, as well as a proposed new policy. One of the main objectives of the proposed authority will also be to enforce fair competition among e-commerce platforms and ensure that consumer interests are protected.
This authority will reportedly also be empowered to demand information within strict timelines. Notably, several of these functions are now carried out by existing regulators, such as the Competition Commission of India (CCI). A dedicated e-commerce regulator is not a completely novel idea.
In Britain, the Digital Competition Expert Panel has recommended that the government set up a pro-competition digital markets unit, tasked with securing competition, innovation and beneficial outcomes for consumers and businesses. However, most countries have so far entrusted regulation of ecommerce companies to their existing competition regulators, consumer protection and data protection authorities, based on the issues involved in each case.
Before setting up such an entity, however, several issues remain unresolved. For example, conflicts in orders given by regulators with overlapping mandates is common in India. Several such overlaps in regulators include CCI and the Telecom Regulatory Authority of India (Trai), CCI and the Real Estate (Regulation and Development) Act.
Without any protocol for resolving conflicting views between regulators on the same issue, stakeholders such as the parties involved in disputes, as well as consumers, at large suffer. Moreover, the regulatory burden for entities involved to supply information, litigate at multiple fora, etc, adding to the cost and (un)ease of doing business.
Conversely, forum shopping by private entities is a risk that the authorities grapple with if there are no clear demarcations in the jurisdiction of various regulatory bodies. Enforcement of newly drafted legislations such as Insolvency and Bankruptcy Code (IBC) by the National Company Law Tribunals
(NCLT) and National Company Law Appellate Tribunal (NCLAT) has also run into issues with contrary orders by agencies such as the Enforcement Directorate (ED). Therefore, the need of the hour is that prior to setting up any further specialised bodies, the legislature devise a way to achieve coordination between different regulators.
Various options can be explored, including entering into bilaterally negotiated MoUs between regulators to determine a standard operating procedure to determine primacy over issues in case of overlap, laying down jurisdiction by a clear legislative mandate, and devising resolution mechanisms in case of a deadlock.
This exercise will not only aid the proposed ecommerce regulator, but can also be adapted for other regulators. It is the only way to prevent duplication and wastage of time, money and effort by the government, private entities and the public at large.
The writer is team lead, Vidhi Centre for Legal Policy, New Delhi