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AS EID approaches, Bangladesh’s annual online shopping surge is once again in motion, with Facebook emerging as the dominant marketplace. The social media platform, while convenient and accessible, has become a breeding ground for fraud and unethical business practices in the absence of adequate regulation. Consumers are left vulnerable, while ethical sellers struggle to compete with unscrupulous actors who operate beyond the reach of formal oversight. According to the Directorate of National Consumer Rights Protection, over 55 per cent of online fraud complaints in 2023 were linked to Facebook sellers. Unlike structured e-commerce platforms, these informal businesses function without registration, bypass tax obligations and offer no guarantees of consumer protection. While the Digital Commerce Management Guidelines 2021 provide a framework for formal platforms, they fail to address the mushrooming of businesses on social media, effectively creating a legal blind spot.

In a much-needed intervention, the High Court issued nine directives on 10 March 2025, seeking to bring online businesses — particularly those operating via Facebook — under regulatory purview. These include mandatory registration with the Directorate of National Consumer Rights Protection, identity verification through National ID and the preservation of business data to facilitate oversight. While these steps are commendable and long overdue, the challenge lies in implementation. With an estimated 400,000 Facebook-based businesses in Bangladesh, a uniform regulatory approach risks being both unwieldy and impractical.

The crux of the problem lies in the absence of enforceable safeguards. Since the early 2010s, Facebook has enabled a new generation of entrepreneurs to reach customers directly. But in the absence of legal accountability, it has become nearly impossible for consumers to differentiate between legitimate sellers and fraudsters. Although the Consumer Rights Protection Act 2009 theoretically covers online transactions, enforcement mechanisms remain ineffective when applied to informal, decentralised social media sales.

Seasonal spikes in fraud, particularly during festive periods like Eid, further underscore the urgency of reform. In 2023, more than 4,200 complaints were lodged with the Directorate of National Consumer Rights Protection between Ramadan and Eid, nearly 70 per cent of which were connected to Facebook sellers. Common scams included misleading advertisements, fake product listings, advance payment fraud and refusal to honour refund policies. In one notable instance, several clothing stores operating via temporary Facebook pages took payments for Eid outfits but failed to deliver, with some buyers receiving counterfeit items and others nothing at all. With these businesses unregistered and ephemeral, authorities faced significant obstacles in taking meaningful action.

While consumer protection remains paramount, the plight of ethical Facebook-based entrepreneurs cannot be overlooked. Many registered businesses find themselves undercut by unscrupulous sellers who flout tax and legal obligations. These unethical operators not only flood the market with substandard or counterfeit goods, but also engage in deceptive practices such as cash-on-delivery scams and fake reviews to undermine competitors. One skincare entrepreneur lamented how her certified products are consistently overshadowed by sellers promoting hazardous, mercury-laden whitening creams — products that should be banned but continue to thrive due to weak enforcement.

The solution lies not in blanket restrictions, but in a balanced, tiered regulatory approach that recognises the diversity of sellers. A graded registration framework — categorising businesses as micro, small, medium, or large based on turnover and advertising spend — would allow for proportional compliance requirements. Offering incentives such as reduced advertising costs, greater platform visibility, or access to training could encourage sellers to formalise their operations. Conversely, penalties including advertising restrictions could deter persistent non-compliance.

A government-led verification system could further strengthen the ecosystem. A centralised portal, issuing digital verification IDs as a prerequisite for advertising on Facebook, would enhance traceability and accountability. Regulatory bodies such as the Bangladesh Telecommunication Regulatory Commission and Directorate of National Consumer Rights Protection could monitor compliance, while institutions like the e-Commerce Association of Bangladesh could play a supportive role in promoting ethical business practices.

Simultaneously, enhanced consumer protection is essential. Larger businesses should be mandated to adopt clear refund and return policies and repeat offenders must be blacklisted. Mechanisms to combat malicious reviews should also be introduced to prevent reputational sabotage of legitimate sellers. Furthermore, reducing reliance on cash-on-delivery transactions could help curtail fraud. Digital payment systems such as bKash and Nagad, along with escrow services that release funds only upon customer confirmation, would offer consumers an added layer of security.

The directives from the High Court mark a turning point in the conversation around Facebook commerce, but policy without execution will do little to disrupt the cycle of fraud. Bangladesh’s digital economy is growing rapidly and with it, the risks of unregulated commerce. A coherent regulatory framework — combining tiered seller classification, identity verification, consumer safeguards and digital payment integration — is imperative for building a safe and equitable online marketplace.

Without such reforms, Facebook commerce will continue to operate in a regulatory grey zone, compromising consumer trust and disadvantaging ethical businesses. The government must act swiftly to translate legal directives into practical enforcement, ensuring that the digital marketplace remains both inclusive and secure — benefiting consumers and entrepreneurs alike.

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Sohana Samrin Chowdhury has worked with the International Labour Organization, UNDP and WFP, focusing on skills development, labour migration and workplace safety policy.