Proposed digital commerce law worries e-traders

The proposed digital commerce law, once passed, would ultimately choke the country's nascent online trade instead of enabling the growth of the potential industry, e-commerce entrepreneurs said at a roundtable on Wednesday.

At the event organised by the Bangladesh Association of Software and Information Services (BASIS), they also said it seems the law solely emphasises punishing online sellers, which should have been the opposite as the already existing legislation is enough to regulate the burgeoning trade.

According to the industry leaders, the e-commerce sector is complying with around a dozen laws. A similar number of government bodies are engaged in regulating or supervising the sector, and each has its own clauses and powers to punish wrongdoers.

However, so many laws and authorities did not help prevent fraudulent schemes by a small number of market players solely due to a lack of enforcement of the regulations.

For instance, the Directorate of National Consumer Rights Protection was empowered to punish Ponzi schemes disguised as e-commerce over the 2019–21 period. There were more than 50,000 consumer complaints against their leader, Evaly, alone, but the body did not stop the firm from defrauding consumers.

There had been some grey areas in terms of legislation regarding the specific dos and don'ts in e-commerce trade, and in 2021, the commerce ministry's standard operating procedure filled the gap, and that was enough, according to industry insiders, who oppose adding another brick to the wall.

What has been proposed?

From the fifth month after the new law is finalised, selling online without a central registration called the Digital Business ID (DBID) would be subject to imprisonment, according to the draft of the Digital Commerce Act 2023.

Former BASIS president AKM Fahim Mashroor said big platform companies would be okay with it, while over 50,000 micro and small online retailers, mostly Facebook-based ones, would be burdened, and a big relief to youth unemployment would be gone.

Foodpanda, the largest food delivery platform that already has a DBID, has yet to obtain DBIDs for two of its subsidiary businesses, and its legal head is concerned that the four-month deadline will be missed due to the slow registration process.

Some said, hassle-free, simple, instant digital registration based only on the sellers' national ID should help.

To prevent Evaly, Dhamaka, and Eorange-style scams, it appears that the government is making the lives of innocent online sellers difficult through excessive legislation.

The industry, which is struggling with an immature e-commerce ecosystem and infrastructure, is also concerned about the proposed financial penalties and imprisonment in cases of late product delivery.

The bills paid online will be stuck for seven days, and even more if a customer complains about the product, and that will hurt sellers' cash flow cycle.

It appears the draft has been prepared without much thought, as it prohibits bulk buying-selling online, even though the country has several impactful B2B platforms and many retailers depend on online procurement.

The draft writers also forgot that no one size fits all as they made the display of production and expiry dates of all the sold products mandatory, while apparel, utensils, and many other products had no expiry dates.

Representatives of top online sellers, industry associations spoke in the programme, and they hoped that the government would reconsider its moves for redundant, overlapping, and conflicting legislation.