Draft e-commerce rules: Hospitality body FHRAI suggests OTAs, FSAs, others to be defined as marketplaces

The federation sought to address issues faced by consumers with marketplaces including problems of overbooking, the inability of OTAs or FSAs to service customers, etc.

Ease of Doing Business for MSMEs: Apex hospitality body Federation of Hotel & Restaurant Associations of India (FHRAI) on Wednesday said it has shared suggestions on the proposed amendments to Consumer Protection (e-Commerce) Rules, 2020. In its suggestions to the office of Anupam Mishra — Joint Secretary of the Department of Consumer Affairs at Ministry of Consumer Affairs, FHRAI requested to define online travel agencies (OTA), food service aggregators (FSA), table reservation services, and ticketing platforms as ‘marketplace e-commerce entities’. It also suggested that it should be 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.

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The suggestions “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,” Gurbaxish Singh Kohli, Vice President, FHRAI said in a statement.

The federation sought to address issues faced by consumers with marketplaces including problems of overbooking, the 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), and donations (supposed to be collected for different charities).

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“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,” said Pradeep Shetty, Joint Secretary, FHRAI.

FHRAI requested the government to safeguard hotel and restaurant operators from unfair trade practices including unilateral marketing offers that include discounts, cashback, promotions, and schemes that may be in dissonance with the agreement between the OTA and the hotel or restaurant owner. It also sought for addressing the issue of “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 foodservice delivery due to the inefficiency of e-commerce entity or market place e-commerce entity.”