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Government Undertakes Examination Of Complaints Of Predatory Pricing Against E-Commerce Platforms

By Lawstreet News Network      Feb 07, 2020      0 Comments
Government Undertakes Examination Of Complaints Of Predatory Pricing Against E-Commerce Platforms

Piyush Goyal, the Commerce and Industry Minister on the 5th of February, 2020 said that the government has been examining allegations of the anti-competitive practices by e-commerce firms and action shall be taken if anything contravening to the policies is found that results in the violations of laws. 

Representations have been received in this Department alleging that some e-commerce platforms are engaged in predatory pricing and are providing excessive discounts,” Goyal responded in the Lok Sabha.

India's Foreign Direct Investment (FDI) policy on the e-commerce sector states that any firm that operates the marketplace model business in a sector is not allowed to directly or indirectly influence the sale price of the commodities and services. E-commerce companies that have any sort of foreign investments can operate a marketplace model, but certain restrictions on the inventory based model are put forth. Goyal also referred to the FDI policy press note 2 - "The Press Note seeks to amend the Consolidated FDI Policy issued on 28 August 2017 (FDI Policy) in relation to foreign direct investments in the e-commerce sector," that was released in December 2018. The cashbacks provided by the group companies of the marketplace entity to the buyers will be fair and non discriminatory. 

In January 2020, the Competition Commision of India (CCI) ordered a probe into Amazon and Flipkart over the malpractice allegation of deep discounting, keeping preferred sellers on the marketplace and also having preferential listings with promotion of private labels. The regulator has further asked Director General Enforcement of CCI to investigate and submit the report by March 2020. This move came after an online trading body - Confederation of All India Traders (CAIT) and mobile retailer's complained against the two e-commerce leaders for indulgence in an alleged anti-competitive behavior. 

A draft national e-commerce policy has been prepared by the government to create a facilitated regulatory environmental for the e-commerce sector's growth in India. 

Goyal further added that the government has also brought down the time period for examination of patent applications to 24-36 months from 72 months in 2014-15. 

 

Author - Dyuti Pandya 



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