NEW DELHI: Competition Commission of India (CCI) wants ecommerce platforms to be more transparent and indicated that businesses can use deep discounting to create markets and that is not necessarily predatory pricing.
The Competition Commission of India will soon put out an advisory for ecommerce platforms, including online retailers and restaurant aggregators, following complaints that their functioning is opaque.
CCI chairman Ashok Kumar Gupta said that the regulator is separately considering whether ecommerce platforms have become large enough to be restrained from using deep discounting practices, which are available to new entrants.
“The advisory will be more to do with transparency (with sellers and partners). Can they be more forthright? Can ecommerce players share in what manner they are, for example, rating various restaurants and the kind of feedback they get?”
Referring to complaints by restaurants that online food delivery platforms had unilaterally revised commissions charged for deliveries, Gupta said, “Just because they have market power to review doesn’t mean they should do it unilaterally. It should be through a consultative process.” However, he made it clear the proposed advisory would be limited to transparent functioning and won’t cover the issue of deep discounting raised by small retailers and restaurants.
CCI is conducting a market study of the ecommerce sector and has published interim findings, which showed that retailers, restaurants and hotel partners were primarily concerned about the algorithms that ecommerce platforms used to rate sellers, suspecting that they favoured their own brands.
Representatives of the Confederation of All India Traders had met with the CCI chairman to raise their concerns over alleged ‘unethical commercial practices’ by ecommerce platforms.
However, Gupta said discounting, including selling below cost, is used by businesses to create a market. “Below cost doesn’t necessarily mean predatory pricing. However, we then have to ascertain whether they have become large enough and should they continue with deep discounting?” he said.
Representatives of the Confederation of All India Traders had met with the CCI chairman to raise their concerns over alleged ‘unethical commercial practices’ by ecommerce platforms.
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