Regulatory Framework of doing Online Business in Bangladesh: Problems and Prospects

The economic activities of the whole world are slowing down due to the outbreak of COVID 19. The business sector of Bangladesh is also affected by the lockdown measures to maintain social distancing. However, the positive effect among all the worst situations is changing behaviour of consumers from manual to digital means of buying and selling products. Bangladesh is on its way to become a digital country. In this circumstance, the advantage of internet technology to grow E-commerce has the potential to promote every industry and thereby contribute considerably to the country’s macroeconomy. However, the country has yet to achieve its E-commerce potential and one of the vital barriers in the way of it is lack of specific legal framework.

The term E-commerce erupt from electronic commerce because the whole transaction conducted through the internet. In the other words, it is the activity of electronically buying or selling of products on online services. Daraz, Ajkerdeal, Evaly, Chaldal, Foodpanda etc. are the popular E-commerce websites in Bangladesh nowadays.

Generally, internet business in Bangladesh starts with the creation of a website or a public page on a social media network and incorporating a secure method of payment is the final part of this initial phase. The majority of commercial transactions are conducted in cash on delivery, with the remainder relying on mobile banking services such as Nagad, Bkash and others. In the E-commerce sector, Bangladesh lacks of unified legal framework to oversee and monitor the rights of consumers and sellers or service providers. Gaining consumer’s trust is a step toward expanding a business since it generates interest in purchasing things, which contributes to the economy.

Interestingly, the Contract Act of 1872, the Sale of Goods Act of 1930, the Consumer’s Right Protection Act 2009 and the Competition Act of 2012 provide the regulatory framework for commercial matters, but they all need to be updated to accommodate the various aspects of E-commerce. In the case of online shopping, the buyer and seller engage into a contract before purchasing a good. The nature of such a contract is virtual. Electronic contracting raises a number of valid questions, such as whether an electronic contract is legally binding and to what extent, or whether it can be used as evidence in the event of a breach. However, under Bangladeshi contract law, there is no specific solution relating to such form of contract. The Consumer’s Right Protection Act 2009 prohibits misleading people with false advertisements in order to sell a product or service and made it as an infringement of consumer’s right but there is no such provision that specifies how such a claim may be established. It happened in several time after the completion of advance payment the owner close their business page without delivering the product. On the other hand, a buyer can only see the product image and read the description when shopping online. As a result, sellers appear to have delivered damaged, expired, or unusable goods in the end because there is no policy to compensate in return. The Sale of Goods Act of 1930 includes a provision for warranty, but it is not mandatory. It also acknowledges that inspecting goods before purchasing is one of the consumer’s rights, but does not specify how this can be done online. In case of fraudulent conduct on the quantity of the product the Penal Code of 1860 provides some remedy in general under section 264 to 267 offences relating to fraudulent use of false instrument for weighing, fraudulent use of weight or measure, being in possession of false weight or measure, making or selling false weight or measure. Such offences are punishable both in terms of fine and imprisonment. On the another note seller is also harassed by the fraud customers when they refuse to receive the goods in cash on delivery method. As a result, the sellers have to face loss in business, at the same time it demotivates them from online business. The Special Powers Act of 1974 does not deal with the deception of virtual selling but in order to penalize for adulterated food, drinks, dugs or cosmetics this law can be a stringent option. The entire business is reliant on the internet; it is expected that the smooth service will propel this sector forward. However, cyber threats do exist in online shopping systems. When customers shop online, websites collect their personal data and that risk their privacy. The shopping website, on the other hand, can be hacked. In this regard Information and Communication Technology Act, 2006 can be applied indirectly. Ironically, none of the law applies to online shopping specifically.

In contrast, the Federal Trade Commission (FTC) is the primary agency in the United States that regulates ecommerce activities. This includes rules governing a variety of ecommerce activities such as commercial email, online advertising, and consumer privacy. Besides this, UNCITRAL adopted a model law in 1996 on electronic commerce, and some of our neighboring countries, such as India, enacted legislation recognizing the evidence and validity of electronic signatures and contracts. Furthermore, Japan has Law concerning Electronic Signatures and Certification Services, Law No. 102 of 2000 and Unauthorized Computer Access Law, 2013 to recognize the electronic crimes. The impactful regulation of China on e-payment system by taking interim measures for the administration of Online Banking business 2002 is exemplary. But even these countries do not have any specific laws for conducting online business. However, they are ahead of Bangladesh in some areas after taking few steps.

The success of E-commerce is dependent on a safe and appealing business ambience. To achieve this objective E-commerce shipping and delivery policy should be well defined so that the customer come to know about the delivery details such as time, cost and terms related to it. Moreover, refunds are an important part of building trust with customers and for this reason explicit refunding policy is also required. Along with these disclosure of products with valid description to the customers, terms and conditions to protect the personal interest of both the parties, uniform cancellation policy, register of transactions, personal data protection, maintaining secrecy of parties, and effective dispute settlement mechanism is required. The very recent initiative taken by the Ministry of Commerce in the Digital Commerce Direction meeting is that Bangladesh Bank will hold money as third-party until products are delivered in case of advance payment. It comes following the complaints of unusual delays in product delivery with some online business platforms designed their business model based on advance payments. This is indeed great news, as it’s the first step to making online shopping safer in Bangladesh’s largely unregulated e-commerce scene.

Despite all the irregularities, the most sanguine step by the Bangladesh is National Digital Commerce Policy, 2018 initiative of e-Commerce Association of Bangladesh (e-CAB) what is approved by the cabinet for development of e-commerce sector. It has enormous potentiality to progress the sector but the implementation will take a long time. In the meantime, to progress the e-commerce sector after pulling out all the hurdle, uniform regulatory framework in online business is obligatory.