Online Dispute Resolution (GS Paper 2, Governance)
Context:
- India’s consumer behaviour has experienced a radical transformation at the most fundamental levels. The rise in smartphone use fuelled by affordable data plans has catalysed an online revolution in the country.
- The novel coronavirus pandemic has further accelerated the process of digital inclusion.
Online accesses:
- It is now not only routine to transact online and have food, personal care items or anything else delivered at the one’s doorstep, but it is also common to learn online, have medical consultations online, and even resolve disputes online.
- These realisations have given India the opportunity to disrupt the status quo with its innovative abilities. Systems such as the Unique Identification Authority of India (UIDAI) and Aadhaar, the Unified Payments Interface (UPI) and the Ayushman Bharat Digital Mission have reengineered markets.
Centralised digital commerce:
- Despite the rapid advancement of digital platforms on the one hand and the pervasiveness of the Internet-enabled phone on the other, small enterprises such as local kirana stores have not gained from this.
- Online purchases from “near and now” inventory from the local store remain in a digital vacuum. This is because, to sell on numerous platforms, sellers must maintain a separate infrastructure, which only adds costs and limits participation.
- The distinct terms and conditions of each platform further limit the sellers’ flexibility. Consequently, small and medium-sized businesses have lost their freedom to choose and participate in the country’s e-commerce system at their will and on their terms.
- Alarmingly, centralising digital commerce transactions on a single platform creates a single point of failure.
Open Network for Digital Commerce (ONDC):
- Given this objective, the Department for Promotion of Industry and Internal Trade (DPIIT) of the Government of India established the Open Network for Digital Commerce (ONDC) to level the playing field by developing open e-commerce and enabling access to small businesses and dealers.
- The ONDC network makes it possible for products and services from all participating e-commerce platforms to be displayed in search results across all network apps.
- For instance, a consumer shopping for a product on an e-commerce app named “X” would also receive results from e-commerce app named “Y”, if both X and Y integrated their platforms with the ONDC. This achieves the dual objective of wider choice for consumers on the one hand and access to a wider consumer base for sellers on the other.
- The ONDC began its pilot in five cities in April 2022, i.e., New Delhi, Bengaluru, Coimbatore, Bhopal and Shillong. Currently, the pilot has expanded to 18 cities, and there are immediate plans to add more cities.
- With India’s e-commerce industry set to reach $200 billion by 2027, this shift from a platform-centric paradigm to democratisation of the nation’s online market will catalyse the inclusion of millions of small business owners and kirana businesses.
Online Dispute Resolution:
- Disputes will be the obvious by-product of this e-commerce revolution. Therefore, it is imperative to support this initiative with a modern-day, cost-effective, timely and high-speed dispute resolution system.
- Online Dispute Resolution, or ODR as it is popularly called, has the propensity to work alongside the incumbent setup and deliver quick, affordable and enforceable outcomes.
- The ODR is not restricted to the use of legal mechanisms such as mediation, conciliation and arbitration in an online environment but can be tailormade for the specific use case keeping the participants in mind.
- While the ODR commonly involves case management systems, integration of communication technologies such as email, SMS, WhatsApp, Interactive Voice Response, audio/video conferencing, overtime and with appropriate data sets in place, it can also involve advanced automation, the use of technologies such as artificial intelligence and machine learning to enable resolutions at the same time as it would take to initiate a transaction over the network.
Application of ODR:
- From making dispute resolution simple to handling complex multi-party disputes; from 24x7 accessibility from the remotest regions to availability in regional languages; from enabling a safe and secure online infrastructure to ensuring minimal touchpoints, the ODR can not only digitise the entire value chain but can also facilitate an enhanced user experience.
- Many e-commerce companies have turned to the ODR with the realisation that in order to maximise transactions it is important to ensure a positive dispute resolution experience.
- For example, the eBay Resolution Center uses the ODR and resolves over 60 million disputes between small traders every year through a platform that enables dealers and purchasers to directly communicate and, for the most part, without the assistance of a third party.
- Alibaba, one of the world’s largest retailers and e-commerce companies, too has adopted the ODR to resolve disputes arising out of transactions over the platform.
ODR in Indian system:
- The ODR is no more a distant dream for India as well. Governments, regulators and private enterprises have been adopting and encouraging its use.
- For instance, the National Payments Corporation of India (NPCI) has mandated platforms in the UPI ecosystem to adopt the ODR for complaints and grievances connected to failed transactions.
- Ingram, SEBI SCORES (or the Securities and Exchange Board of India SEBI COm plaints REdress System), RBI CMS (or the Reserve Bank of India Complaint Management System), MahaRERA (or the Maharashtra Real Estate Regulatory Authority), MSME Samadhaan (or the Micro Small and Medium Enterprises Delayed Payment Monitoring System), and RTIOnline (or the Right to Information Online) are other examples of ODR systems that are widely used in the country.
Way Forward:
- The ODR will help mitigate litigation risk and provide valuable insights into problems faced by consumers. The courts and consumer forums can do away with matters which do not warrant their intervention, thus easing the judicial logjam.
- Consumers are provided with another choice for effective redress of their grievances, thereby building trust, confidence and brand loyalty.
- A dispute resolution framework that includes a customised ODR process can play a role in the network achieving its steep five-year target of adding $48 billion in gross merchandise value to India’s e-commerce market, a network of 90 crore buyers and 12 crore sellers with the least hiccups.
