Ecommerce platforms capitalise on customer data created by sellers: CAIT

Ecommerce marketplaces do not share customer data with listed sellers or enterprises on their platform, despite taking consent from customers for the same in their privacy policy, according to a white-paper released by the Confederation of All India Traders (CAIT) on Tuesday.

The CAIT is a trade body that represents several traders and trade associations in India. It has been against ecommerce platforms, notably Amazon and Flipkart.

"A firm cannot personalise its products and services till it is given comprehensive data about its customers' behaviour," the CAIT states in its white-paper on ecommerce. "Further, this personalisation and improvement based on customer feedback is based on a seller's unique product and service."

"Thus, concerns are raised about ecommerce platforms capitalising on data that is neither created by them (created by consumers) nor for them (created by the seller of the concerned product or service)," the CAIT says.

"There is a need for regulation of the usage and sharing of data by ecommerce entities to have a level-playing field, and prevent the misuse of the right of privacy of customers accessing the platforms," the white-paper added.

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The CAIT white-paper notes that customers' preference and behavioural patterns help ecommerce marketplace platforms promote their own products by way of targeted listing.

"The sellers and other manufacturers are devoid of this data, despite being the primary sellers (on ecommerce marketplaces)," according to the CAIT white-paper.

"It is important to understand that the platforms are only meant to facilitate trade between manufacturers or sellers, and consumers. Despite this, it is the facilitators who have been gaining undue access to such data," the CAIT states.

"The manufacturers, who spend a great deal of resources and time into research and development are put in a disadvantageous position to lose to such marketplace platforms," it stated.

The CAIT has called for prohibition of data-masking by ecommerce entities because the sellers enable the data to be generated in the first place.

Due weightage should also be given to an idea of setting up a specialised regulator, says Praveen Khandelwal, Secretary General of CAIT, in the white-paper.

"Owing to technicality of the ecommerce platforms, and the web of several stakeholders with different concerns, it is desirable to have such a regulator to implement the inclusive ecommerce policy, which would have ex ante regulations to be applicable in ecommerce segment, for the benefit of entire ecosystem," Khandelwal adds.

The white-paper points out that ecommerce entities are regulated by different regulators, which has led to a piecemeal approach to regulation. A dedicated ecommerce regulator can protect the interests of small traders, MSMEs, individuals, and ensure policy agility, it adds.