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Draft digital commerce act facing backlash Entrepreneurs say it would hinder development of the sector

STAR BUSINESS REPORT

E-commerce entrepreneurs yesterday came down heavily against the formulation of a new law to regulate the sector, saying that it would hinder the development of digital commerce in Bangladesh.

The “Digital Commerce Act 2023” recently prepared by the commerce ministry includes provisions that will practically upend the business of small-and-medium digital commerce entrepreneurs, they said.

The law bars people from running a digital business without obtaining a Digital Business Identity (DBID) from the ministry. If anyone is found operating a digital business without it, then that person would be fined Tk 5 lakh or have to spend one year in prison as a penalty.

“The new law will be suicidal for the sector. I think we don’t need a law because existing laws are enough for the sector,” said Fahim Mashroor, chief executive officer of AjkerDeal.

“Imagine a woman entrepreneur who runs a small business through a Facebook page is made to go to jail or face a Tk 5 lakh fine for not getting a DBID. This law is particularly harmful for them,” he added.

Millions of educated young women are not getting employed as there are not many jobs available for them. As such, a significant portion of them have been trying to sustain their livelihoods by starting online businesses using Facebook or other digital platforms.

“Whereas we should be trying to help them, we are doing everything to make it harder for them to do business. Millions of small online traders are being blamed and new laws are being put in place for a few e-commerce fraudsters,” Mashroor said.

He was speaking at a roundtable on the draft of the new Digital Commerce Act, organised by the Bangladesh Association of Software and Information Services (BASIS) at its office in Dhaka.

The law comes amid widespread scams centring the e-commerce sector in 2021, when it was found that some fraudulent platforms embezzled thousands of crores of taka from customers and merchants.

Wassem Alim, the CEO of Chaldal, a top online grocery platform, said the law would restrict the sector’s growth rather than help it flourish.

There is a trend in the country where laws are enacted only after an incident occurs.

“But when any fraud happens, no authority gets the courage to implement the law. So, no fraud occurs because of the lack of law, it takes place due to the lack of implementation,” he added.

Alim then said the digital commerce sector in Bangladesh is very small and so, a law can be formulated when it grows further. Alim also criticised the harsh penalty regime included in the law.

Syed Mohammad Kamal, a director of BASIS and country manager for Mastercard Bangladesh, said there are adequate laws or rules to regulate e-commerce in Bangladesh, such as the consumers’ rights protection law, Bangladesh Bank’s escrow system and logistics authority.