The Centre has received complaints from traders, retailers and industry associations against marketplace e-commerce entities on discounting, predatory pricing and misuse of market dominance and those have been forwarded to relevant government agencies for necessary examination and investigation, Minister of State for Commerce & Industry Som Prakash has said..

“Competition Commission of India is in receipt of certain information where e-commerce companies are alleged to have entered into anti-competitive agreements and/ or abused their dominant position. Necessary action is being taken,” the Minister said in a reply to the Rajya Sabha.

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The new e-commerce policy (being worked out) seeks to address such non-compliance and the government, at present, is studying comments on the draft policy received from stakeholders, he said. These relate to the definition of e-commerce, role of marketplace entities and e-commerce companies, among other related issues.

Firms with foreign funds

E-commerce companies in India with foreign funds can operate only as a marketplace entity which means that they can provide an online platform to other buyers and sellers to transact but cannot sell their own products or exercise control or ownership over the inventory.

Traders’ body CAIT has been complaining to the government about alleged flouting of taxation and FDI rules by foreign-funded e-commerce companies such as Amazon and Flipkart. The body has been accusing the e-commerce companies of creatively structuring its marketplace business model and creating a facade in order to exercise control over inventory and retail prices.

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The Minister pointed out that the Consumer Protection (e-Commerce) Rules, 2020 were notified on July 23, 2020 to further strengthen the regulatory framework for prevention of unfair trade practices in e-commerce including flash sales.

“Government has sought suggestions on the proposed amendments to the Rules by placing it on the website of the Department of Consumer Affairs,” he said.