Rule 5 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Rule 5 is headed "Liabilities of marketplace e-commerce entities". This article covers sub-rules (1), (2), (4) and (5): the conditions for the exemption from liability under the Information Technology Act, 2000, the seller undertaking about accurate content, the terms with sellers and the record of repeat sellers. Sub-rule (3), the disclosure list, has its own article.
This article takes the rules as amended up to the Consumer Protection (E-Commerce) (Amendment) Rules, 2026 (G.S.R. 789(E) of 9 September 2026, in force from 1 January 2027). The 2026 amendment inserts rule 5(6) and (7) from 1 January 2027, under their own heading below. Later amendments should be checked on the website of the Department of Consumer Affairs.
A marketplace that wants the exemption under section 79(1) of the Information Technology Act, 2000 must comply with section 79(2) and (3). It must make sellers undertake that descriptions, images and content are accurate, must set out in its seller terms any differentiated treatment, and must take reasonable efforts to record sellers who repeatedly offer content removed under three named Acts. From 1 January 2027 it also may not use collected information for same-brand sales or to promote associated sellers without express and affirmative consent, and may not collect bundled fees for unrelated services.
Rule 5(1): the exemption and its conditions
Rule 5(1) says a marketplace e-commerce entity "which seeks to avail the exemption from liability under sub-section (1) of section 79 of the Information Technology Act, 2000 shall comply with sub-sections (2) and (3) of that section, including the provisions of the Information Technology (Intermediary Guidelines) Rules, 2011".
The exemption is optional: the duty applies to a marketplace that "seeks to avail" it. A marketplace that complies with the conditions can rely on it; one that does not comply cannot expect it. The rule refers to the 2011 intermediary rules as printed. The current information technology rules should be checked, since this reference is an old one and the rule itself names no replacement.
Rule 5(2): the seller undertaking
Every marketplace "shall require sellers through an undertaking to ensure that descriptions, images, and other content pertaining to goods or services on their platform is accurate and corresponds directly with the appearance, nature, quality, purpose and other general features of such good or service".
So the marketplace must collect the undertaking from each seller; it is not enough to publish a general policy. The undertaking covers descriptions, images and other content, and the test is that the content "corresponds directly" with five features: appearance, nature, quality, purpose and other general features. A seller's matching duty to keep advertisements consistent with the real characteristics is in rule 6(4)(c). Platforms that want their onboarding paperwork reviewed can use our compliance advisory service.
Rule 5(4): terms with sellers
Every marketplace "shall include in its terms and conditions generally governing its relationship with sellers on its platform, a description of any differentiated treatment which it gives or might give between goods or services or sellers of the same category".
The words "gives or might give" cover treatment that has not yet happened. If a marketplace favours sellers who use its logistics, or gives some sellers better placement, the seller terms should say so. The same theme appears for consumers in the ranking disclosure of rule 5(3)(f); see our article on rule 5(3).
Rule 5(5): the record of repeat sellers
Rule 5(5): every marketplace "shall take reasonable efforts to maintain a record of relevant information allowing for the identification of all sellers who have repeatedly offered goods or services that have previously been removed or access to which has previously been disabled" under:
- the Copyright Act, 1957;
- the Trade Marks Act, 1999; or
- the Information Technology Act, 2000.
The proviso: "no such e-commerce entity shall be required to terminate the access of such seller to its platform pursuant to this sub-rule but may do so on a voluntary basis". The duty is to keep a record, using reasonable efforts. The rule does not oblige the marketplace to remove the seller; that is left to the marketplace's own choice. Our post on protection of trademarks on e-commerce platforms looks at the brand-owner side.
An invented example: Orchid Online notices that "Gemini Gadgets" has repeatedly listed items that were taken down after a trade mark complaint. Rule 5(5) requires Orchid Online to keep a record that identifies Gemini Gadgets as a repeat seller. It need not close the account, though it may.
From 1 January 2027: rule 5(6) and (7)
The 2026 amendment inserts two sub-rules after rule 5(5).
Rule 5(6) reads: "No marketplace e-commerce entity shall use information collected by it, (a) for sale of goods directly or indirectly by any seller, whether related or not, bearing a brand or name which is common with that of the marketplace e-commerce entity; or (b) to promote or advertise any seller as being associated with the marketplace e-commerce entity, unless the marketplace e-commerce entity has obtained the express and affirmative consent for such use from the consumer(s) to whom such information pertains."
Rule 5(7) reads: "No marketplace e-commerce entity shall collect any bundled fees from users for services provided on the e-commerce platform for any other services that are unrelated to the e-commerce platform", with a proviso that nothing in it applies "to any loyalty or membership programme or to any benefit, service, offer or incentive provided in connection with or pursuant to such loyalty or membership programme".
| Sub-rule | Bar from 1 January 2027 | Exception or condition |
|---|---|---|
| 5(6)(a) | Using collected information for sale by any seller, related or not, with a brand or name common with the marketplace | Express and affirmative consent of the consumer to whom the information pertains |
| 5(6)(b) | Using collected information to promote or advertise a seller as associated with the marketplace | Same consent |
| 5(7) | Collecting bundled fees for unrelated services | Loyalty or membership programmes and their benefits are outside the bar |
Rule 5(6) concerns personal information, and data protection is a separate subject; our post on the DPDP Act for e-commerce companies deals with it. For the other 2027 changes in rule 5 see rule 5(3) and our rule-by-rule account of the 2026 amendment.
Need help with marketplace compliance?
If you run a marketplace and need seller undertakings, terms and records put in order, or want to prepare for the 2027 data and fee bars, our compliance advisory team can help.
Key takeaways
- The IT Act exemption in rule 5(1) is conditional on compliance with section 79(2) and (3).
- Sellers must give an undertaking that content is accurate (rule 5(2)).
- Seller terms must describe any differentiated treatment (rule 5(4)).
- A record of repeat sellers is required, without any duty to terminate (rule 5(5)).
- From 1 January 2027, rule 5(6) and (7) restrict use of collected information and bundled fees.
Read next
- Rule 5(3): what a marketplace must disclose about sellers and ranking
- Rule 6(4) and (5): seller contract, grievance officer and product disclosures
- Consumer Protection (E-Commerce) (Amendment) Rules, 2026
- Protection of Trademarks on E-Commerce Platforms
Disclaimer: Based on the rules, regulations and guidelines named above as published in the Gazette of India or on the CCPA website, with the amending notifications the article names (consulted on 3 October 2026). Later amendments, the Consumer Protection Act, 2019 provisions referred to, State rules and CCPA advisories should be checked. This article is general information, not legal advice; check the official text before acting.