Govt to put checks on discounts and freebies offered by giant e-tailers

The Indian Government is planning to put checks on discounts and freebies offered by e-commerce firms.

Commerce and Industry Ministry is mulling to place an e-comm policy that will keep a check on predatory pricing or behaviour in the interest of small retailers before an expected push to regulate e-commerce worldwide by WTO, said a source close to the development.

Physical retail stores are vanishing worldwide and big e-tailers have a big role in it as they have deep pockets and are willing to suffer loss till competition is almost eradicated, added the source to TOI.

He further said the process will lead to dictation by these players in long run, which should be not allowed.

Currently, there is no law for tackling predatory practices by e-tailers in India.

In July, a sunset clause to address deep discounting was proposed in a draft e-commerce policy, but could not take a shape of a law.

Last week, AIOVA, which represents 3500 sellers, had written to PMO complaining about the e-commerce majors like Amazon and Walmart exploitation of small retailers. They requested to check retail trade in the country as marketplaces are practicing unregulated and anti-competitive business model.

The body had also in the past reached out to several govt departments raising the issue of deep discounting and unfair practices like giving preferential treatment to certain large sellers, by e-commerce marketplaces.

Early this year, it said that Flipkart’s WS Retail and Amazon’s Cloudtail are destroying their business by indulging in predatory pricing and discounting when selling their private label products. Swadesh Jagaran Manch, an affiliation of the Rashtriya Swayamsevak Sangh (RSS) and other trade lobby groups had also raised flouting of FDI norms by big e-tailers.

Taking all these into account, the commerce ministry has been also consulting all concern and related departments including DIPP before putting revamp e-commerce policy before the cabinet for approval.