If you happen to be Pakistan’s leading e-commerce player, quit raving about your Black Friday records. And start worrying about the noose. For recent news reports suggest that regulations for Pakistan’s online commerce market are just around the corner.
Within a month, ministries of commerce, IT, and finance will reportedly develop rules to govern local e-commerce market. The so-called Strategic E-Commerce Policy Framework (SEPF) – one wonders why they like adding “strategic” to just about every policy – will reportedly look at a number of things. These include payment gateways, logistics, IPR, data privacy, consumer protection, dispute resolution. And wait for it: taxes and duties!
E-commerce meshes together different sectors, so determining regulatory jurisdiction can be tricky. Should it be a Commerce Ministry turf, because at its heart, e-commerce is a commercial concern with all the B2B/B2C buying, selling and delivering of goods and services? Should it be regulated by the Ministry of IT, for e-commerce is chiefly an Internet-enabled business? Or should the SBP have a central role, because e-commerce involves routing payments through bank-led payment gateways?
There will be complexities in deciding who will be the ultimate regulator for online sellers in Pakistan. For now, it is good to know that the three concerned ministries will be sitting down together in the joint working group. Later on, when the rules are being developed, concerns over regulatory authority can be addressed. It will be better to provide a single regulatory window to the market players, maybe through creation of a new agency.
But there are some basic questions that need to be settled first. The e-commerce sector is in early growth phase. Does it really need to be regulated at this stage? One answer could be in the negative: don’t burden online retailers with more regulations. They are operating in a business environment that is already blighted by regulatory knots. If you want them to grow further, let them be.
The other argument is that precisely because online marketplaces are yet to properly take off; it is the right time to put in necessary checks and balances so that the sector can be on a sustainable footing in the long run. Asking this market to self-regulate itself would put consumers/customers at risk. So, better have a regulatory code of conduct on issues such as electronic contracts, pricing, product disclosures, warranty disclaimers, advertising practices, among other things.
There is a need to address concerns of both sector’s growth and consumer protection. Those two objectives may seem competing to many, but they don’t have to be. To bring compatibility, it is recommended that the said working group also bring the private sector on board. Besides, the Competition Commission of Pakistan must also have a seat at the table.
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