Fair trade watchdog The Competition Commission of India (CCI) has advocated that e-commerce players increase in transparency in search rankings, collection and use of data and user review and rating mechanisms.
The CCI has also recommended that e-commerce platforms notify the businesses of any proposed changes in terms and conditions and only bring them into effect after a reasonable notice period.
In what could have significant implications for e-commerce platforms such as Amazon and Flipkart, the competition watchdog has said they should come out with clear policies on discounts and also transparency in rating of sellers.
CCI on Wednesday unveiled a set of self regulation guidelines for e-commerce sector on Wednesday along with findings of an e-commerce market study it initiated in April 2019.
“Bring out clear and transparent policies on discounts, including inter alia (among other things) the basis of discount rates funded by platforms for different products/suppliers and the implications of participation/non-participation in discount schemes,” said the report titled titled, “Market Study on e-commerce in India: Key Findings and Observations”.
The Competition Commission of India has also advocated that e-commerce players increase in transparency in search rankings, collection and use of data and user review and rating mechanisms.
The CCI has also recommended that e-commerce platforms notify the businesses of any proposed changes in terms and conditions and only bring them into effect after a reasonable notice period.
Trader’s bodies including the Confederation of All India Trader (CAIT) had approached the commission in 2019 to discuss “unethical commercial practices” of e-commerce platforms Amazon and Flipkart as.
CAIT has also alleged that theses two E-commerce players have violated FDI policy.
The study noted that “the three elements, which according to the business users of the platforms, are susceptible to manipulation/exploitation by platforms, are search results, sellers’/service providers’ data and user review/rating mechanisms.”
The CCI had noted concerns among sellers on e-commerce platforms gave preferential treatment to some sellers including higher search rankings as well as concerns about “arbitrary increases in commissions” charged by e-commerce players.
Restaurants associations including the National Restaurant Association of India had protested against deep discounting by online food ordering platforms such as Swiggy and Zomato as well as unilateral hikes in commissions charged by them.
The CCI has also recommended that platforms describe the key parameters of search rankings and clearly state if and how any payments by any listed businesses on the platform could influence rankings.
According to the report a large number of sellers on online e-commerce platforms presumed that search rankings were influenced by arrangements between businesses and the platforms as well as their participation in discounting schemes.
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