Amazon and Flipkart India must democratize online sales

Merchants are protesting to demand the shutdown of online shopping platforms Amazon and Flipkart last year. Source: AFP

The latest clarification on the regulation of e-commerce on some of the country’s most popular e-commerce platforms, like Amazon and Flipkart, in India’s latest e-commerce policy draft. As part of this policy, the government issued guidelines that e-commerce companies should treat sellers on their platforms equally and ensure transparency in order to avoid mistakes and irregularities.

The draft edict comes after the Indian government deliberated for months on a comprehensive new e-commerce regulation manual. Allegations had been made against major platforms like Amazon India and Flipkart by physical retailers, claiming that online retail giants had flouted existing federal regulations, creating an unequal and unfair virtual marketplace.

A revealer Reuters special report in February 2021, had discovered that Amazon had given preferential treatment to a small group of elite sellers on its service in India for several years. These sellers were allegedly used by Amazon to circumvent India’s foreign investment regulations.

The latest version of the still-pending national e-commerce policy stresses that major platforms, which attract many buyers and sellers, must operate transparently and fairly with all sellers, regardless of their preference.

“Ecommerce operators should guarantee equal treatment to all sellers / sellers registered on their platforms and not adopt algorithms that lead to prioritizing certain sellers / sellers,” said the project which came out as a result of a high-level inter-ministerial meeting of the Council. government on March 13.

The project describes what is basically an “antitrust” version of the current digital marketplace guidelines, with caveats to avoid any special considerations, variable rates and promotional influence for different sellers on the platform.

“E-commerce operators should ensure that they have clear and transparent policies on discounts, including among others the basis of platform-funded discount rates for different products / suppliers and the implications of participating / non-participating in discount programs, to ensure fair and equal treatment, ”adds the draft policy.

The government is trying to address the burning issues of preferred vendors and online discounts that have hampered the growth of offline retailers in India and sowed distrust of the reliability of India’s largest e-commerce services. In India, e-merchants are known to have a set of preferred vendors who get the majority of the business generated from these platforms.

In 2018, the government proposed Press Note 2, revising the then existing Press Note 3. He asked online marketplaces to ensure that they do not sell the products of their group companies on their platforms.

The federal government has scheduled three more meetings between the 17th and 19th of this month, to deliberate on foreign direct investment (FDI) issues in e-commerce. These meetings will be attended by Amazon, Flipkart, Confederation of All Indian Traders, Retailers Association of India, Confederation of Indian Industry and Federation of Indian Chambers of Commerce and Industry.

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