Competition Commission of India initiates ecommerce market study

The study on ecommerce by the Competition Commission of India to gather information and insights from market participants in goods and services.

30th Aug 2019
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The Competition Commission of India (CCI) has initiated a study on ecommerce to gather information and insights from market participants in goods and services.


The study includes sectors like mobile, grocery, food, electronics or electrical appliances, lifestyle, and hotels.


According to the interim findings, restaurant owners, online platforms, hotels, online travel agencies, sellers and e-marketplaces raised concerns related to discounts, commission, and algorithm issues.


THE IMPORTANCE OF PACKAGING IN E-COMMERCE



Vendors or sellers said that ecommerce platforms give preferential treatment to certain sellers; there is a high search ranking for preferred sellers and feel compelled to participate in discounts.


On the other hand, ecommerce marketplace players have said that the sellers are independent third party players; sellers participate in deals at their own discretion; search ranking of sellers is based on algorithms; and there is a mechanism in place to deal with unauthorised vendors selling counterfeit products.


Similarly, the hotel industry argued that players are forced to set unviable rates because of discounts by online travel operators.


They also informed the CCI that they see unilateral increase in commissions by online tour operators, and the search ranking algorithm is opaque.


Online tour operators said that prices are determined by hotels and they offer discounts above listed room price.


In the food sector, restaurants have said that deep discounts by online platforms are "cannibalising dine in" and the burden of discounts is shifting to restaurants.


They have also noted that online food platforms arbitrarily increase commissions and compelled them to use their manpower.


Whereas online food platforms stated that restaurants participate in discount schemes at their own discretion and commissions are decided based on mutual negotiations and there is no restriction on the use of manpower.


The CCI sought views of all stakeholders by September 30 as the study is still on. The interim findings were shared during a CCI's workshop on ecommerce - changing competition and landscape in India.


"It is part of an exercise as part of a market study on ecommerce being conducted by CCI," its chairman Ashok Kumar Gupta said.


(Edited by Saheli Sen Gupta)




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