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Alexa, report to the e-commerce regulator


The new e-commerce policy being framed by the government has opted for a broad definition of the term `e-commerce’, bringing in a wide variety of applications, platforms and content services under its umbrella, according to a source privy to the draft policy.

The intention is to bring all B2B, B2C, consumer-facing, consumer-based content platforms, apps-based commerce and IoT device-based services under the policy, potentially engulfing products like the Amazon Echo, which is powered by artificial intelligence-driven virtual assistant Alexa, and MG Hector, the Internet-enabled vehicle from Morris Garages in the regulatory realm of e-commerce, the person said by way of example.

The draft policy envisages the e-commerce regulator—enabled through legislation in August 2019—to be well empowered, including legal backing to summon information and data from companies. The policy considers data on a par with intellectual property or financial capital. Taking cues from laws in Europe, Japan and Brazil, it goes by the principle that if an AI-enabled device, say a car, collects data to customise services for the user, it is e-commerce.

In the context, it has suggested that the government frame laws to impose a data tax on companies. While the government has already introduced an equalisation levy—2% on sales of more than Rs 2 crore—on foreign e-commerce companies by amending the finance bill in March, enshrining it in policy as a general principle means there is a chance it could in future extend to domestic companies.

An e-commerce policy drafted a year ago had drawn flak for restricting foreign marketplace platforms such as Amazon and Walmart-owned Flipkart from owning inventory. It was then seen as creating an unfair advantage for Indian companies. The new draft has left the recommendation untouched, although it clarifies that marketplaces can operate support services such as warehousing and logistics. The reasoning is that the policy cannot be inconsistent with the country’s sectoral investment norms applicable to foreigners.

The source said that since another committee (headed by Kris Gopalakrishnan) is already working on personal data protection, the draft policy skirts the issue. However, it does suggest that the government frame laws so that it can access data collected by the companies. It wants the e-commerce regulator to decide on mirroring and localisation of relevant data and recommends a safeguard audit of the data storage location if it is outside the country. An audit certificate would have to be presented for approval by the government. The approval would be automatic if the auditor is Indian.

The draft policy appears to have content apps such as Chinese company Bytedance’s widely popular TikTok video platform in its crosshairs as it puts the onus of the content on the copyright holder. If the platform claims to own the copyright over content produced by a user, then the responsibility of the appropriateness and legality of the content would also be on the platform, the source said.

According to the person, the policy has kept in mind the potential of ecommerce to make India a cloud computing hub and generate jobs. For instance, it has sought to include home stays in e-commerce so that people in far flung areas and villages that have travellers’ interest can benefit.

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