News & Analysis

ONDC Developing Dispute Resolution Draft Paper

The paper is likely to be based on Niti Aayog's dispute resolution policy of 2021 and be available within the next couple of weeks

One of the key concerns around how the open network for digital commerce (ONDC) was how it would tackle dispute redress. Even the parliamentary standing committee on commerce had made these observations when it delved into the challenges around the digital protocols that the government is developing to make eCommerce more democratic. 

Now, the ONDC chief executive T Koshy has confirmed that an online dispute resolution system is under preparation whereby a third-party agency would review the digital trail left behind by individual customers and act as a sort of arbitrator. 


How would the process work?

Consumers would also be able to track the status of complaints, how many of those were resolved and would also be able to provide a rating to the merchants on the network, the official told Economic Times. The network will also record all complaints filed against a particular entity which then would be linked to a reputation index that functions across the network and tabulates complaints raised, resolved and unresolved as well as legal issues that were raised.  

The draft paper on dispute resolution would be available within the next two weeks and is aimed at boosting consumer trust that gets built around a reputation ledger solution. ONDC would also put out a public document on the grievance redress mechanism whereby the dispute resolution agencies would examine the cases. 


Dispute resolution or Trust building? 

While the dispute resolution process is a welcome step towards creating transparency in any system, there are those that also believe that decentralized digital operations would bring in far better levels of trust and transparency. “The eSamudaay model works on a person or an entity who owns the local digital platform (LDP) and functions as a nodal officer in case of disputes,” says Anup Pai, co-founder of the company that has partnered with ONDC to onboard sellers. 

Moreover, since the operations of such LDPs are in a smaller area where the likelihood of the buyers and sellers actually knowing each other, the trust factor would be far higher than a centralized system where dispute redress begins with bots and ends with the customer returning the product and the platform refunding the money while black-listing habitual offenders among the merchant community, he says. 


Building trust can’t be manipulated

Readers would recall that many of the existing ecommerce platforms are facing the competition commission scanner for fake reviews and ratings that they upload on the website against both the product and their sellers. Though these platforms too have a seller rating system, these are mostly skewed without a clear reputation ledger mechanism in place that transcends the platforms. This means a seller on Flipkart gets the same rating on Amazon too. 

ONDC chief executive T Koshy says the public document on grievance redress would be up for discussion in a couple of weeks. He believes that dispute resolution should be a digital trail and be across the network with the model being a self-correcting one so that merchants are naturally compelled to behave in order to keep their reputation and their revenues. 

“There were hardly any disputes in the earlier regime where buyers and sellers knew each other well and any issue with any product that changed hands was always the responsibility of the seller who either refunded or ensured a replacement,” says Pai while pointing out that the digital grievance resolution too should be a transparent process where reputations are made or broken in a manner that everyone knows but none can manipulate. 

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