CCI appeals to e-commerce firms to increase transparency

The quickening pace of competition in India's e-commerce space has brought forward many complaints, leading to an appeal by the Competition Commission of India (CCI) to e-commerce platforms to be more transparent in their functioning.

CCI chairman Ashok Kumar Gupta has raised questions over e-comm firms, including retailers and restaurants aggregators, non-transparent rating system for their sellers and partners.

"Can e-commerce players share in what manner they are, for example, rating various restaurants and the kind of feedback they get?" Gupta was quoted as saying in an ET report.

Referring to restaurants complaints about an increase in commission charge for delivery, Gupta said online food delivery firms should revise such moves through a consultative practice.

The competition watchdog will soon issue an advisory focused on transparent functioning for e-comm platforms, said the ET report.

An interim finding of a market study conducted by CCI has revealed that retailers, restaurants and hotel partners were primarily concerned about the algorithms that e-commerce platforms used to rate sellers, suspecting that they favoured their own brands.

CCI is about to examine whether e-comm players can continue with the practice of deep discounting. Gupta has ruled out that below-cost selling was predatory pricing. "However, we then have to ascertain whether they have become large enough and should they continue with deep discounting?" he added.

CCI's chairman further said that it would consider the experience of other mature jurisdictions while creating commitment and settlement mechanisms.

This move comes after retailers and restaurant associations complained against food aggregators, saying they were harming their business through unethical practices.

Early this year, more than 500 restaurants signed a petition addressed to the CCI and to the Prime Minister's Office accusing Swiggy, Zomato, Foodpanda and UberEats of misusing their dominant position in the Indian market.

The petition also accused these aggregators of using in-house kitchens and internal sourcing model for eating up their business.

Besides, the Confederation of All India Traders or CAIT had also approached CCI over unfair business practice adopted by the e-commerce firms. CCI had assured that it would take action against the flouters.

Commerce and Industry Minister, Piyush Goyal, had also warned online food delivery and e-comm firms to avoid hurting small businesses through their predatory pricing practices, though there has been no concrete action taken by the government yet.