Editorial: Taming India's e-marketplaces

As e-commerce continues to grow rapidly beyond metropolitan and Tier-1 cities, its business practices have come under intense scrutiny from authorities, with the Centre attempting to rein them in through a spate of regulations. In a bid to further tighten the norms governing online marketplaces, the government has amended the Consumer Protection (E-Commerce) Rules, 2020, notified under the Consumer Protection Act, 2019. The amended framework covers a wide gamut of business practices, including the display of prices, search results, sponsored content, and deceptive design choices known as “dark patterns”. These new measures arrive at a time when complaints of predatory practices are mounting.

While not every aggrieved customer approaches the National Consumer Helpline (NCH), nearly one-third of the total 17.7 lakh grievances received in 2025 pertained to the e-commerce sector.The Centre finds itself struggling to keep pace with nimble e-commerce platforms that constantly devise newer methods by leveraging innovations in digital technology and marketing. The Consumer Protection (E-Commerce) Rules, 2020 enforced norms relating to price breakdowns, country of origin, and return options. The rules also banned the use of pre-ticked boxes that undermined explicit user consent.

As consumer complaints began to mount, the regulations mandated that platforms appoint a grievance officer whose details must be clearly displayed on their websites. The 2020 framework was followed in 2023 by guidelines on dark patterns issued by the Central Consumer Protection Authority (CCPA), which listed and banned 13 specific manipulative practices, including drip pricing, false urgency, and subscription traps. Violations carry stringent punishment, including heavy fines and imprisonment.The 2026 rules not only enforce compliance with the 2023 Guidelines for Prevention and Regulation of Dark Patterns but also direct e-commerce platforms to undertake an annual self-audit and display a certificate of compliance.

Furthermore, they envisage the integration of e-commerce platforms with the national consumer grievance redressal mechanism or the NCH system. It is indeed a decisive regulatory move that attempts a delicate tightrope walk to balance consumer protection with the so-called ease of doing business.Although the regulations establish a robust framework on paper, their effective implementation is fraught with complexity and practical hurdles. To begin with, monitoring numerous e-commerce platforms and millions of dynamic product listings presents a daunting challenge. Secondly, the ever-changing technological landscape and operational opacity make tracking violations difficult.

The hidden, black-box nature of algorithms, complex automated pricing systems, and data practices place these platforms beyond the pale of standard regulatory oversight.Market dynamics and the winner-takes-most model force platforms to resort to aggressive marketing and even unfair practices. Eventually, there will be space for only two or three players, making it a bitter struggle for survival.

Consequently, platforms spend huge sums of money on customer acquisition through deep discounts, promotional offers, and subsidised delivery costs. Only those with deep pockets can survive the initial cash burn. Once they reach the top by capturing a massive market share, they are in a position to dictate terms, recovering past expenditure while making huge profits for years to come. Thus, the possibility of self-regulation and a voluntary transition to a transparent, accountable, and consumer-centric e-commerce ecosystem remains far-fetched.