CCI’s Self-Regulation Relief For Ecommerce Upsets Traders’ Bodies

The competition commission of India (CCI) encouraged ecommerce companies including Amazon and Flipkart this week to use self-regulation to solve issues of search rigging, reviews, deep discounting, fake goods and to uphold seller interests. But that has not gone down too well with traders and mobile phone retailers who are upset over the step was taken by the statutory body.

The All-India Mobile Retailer Association (AIMRA) and the Confederation of All India Traders (CAIT) are discontent with CCI’s new policy and demand stricter action. Stakeholders questioned the merit of allowing ecommerce companies to self-regulate to solve unfair practices that have been adopted by the very same companies. As per an ET report, the two groups are likely to meet union minister for commerce Piyush Goyal next week.

Praveen Khandelwal, CAIT secretary general, tweeted, “Knowing well the unfair and monopolised business tactics of r commerce companies, what is preventing @CCI_India to take action. Why recommendation and soft view on irregularities.”

Khandelwal also urged union minister Piyush Goyal to take action against ecommerce platforms, instead of pushing for self-regulation. He demanded that the government should constitute a regulatory authority for ecommerce companies.

Sumit Agarwal, national secretary of CAIT, also tweeted, “The report gives enough details as to how ecommerce marketplaces are indulging in unethical business practices such as predatory pricing and deep discounting.The @CCI_India report released after @TEAMCAIT’s [CAIT] relentless pursuance.”

Even the mobile phone retailers’ body, AIMRA came forward. Arvinder Khurana, president of AIMRA said, “If they (ecommerce players) wanted to self-regulate, they would have never indulged in unfair practices and flouted FDI norms in the first place.”

In its report, ‘Market Study on E-commerce in India: Key Findings and Observations’, CCI asked ecommerce companies to keep a check on themselves in various matters that included discounting, revision in the contract term, data collection, review mechanism and search ranking.

CCI’s self-regulation policy included the following:

• Bring clear and transparent policy on data collection, review and rating mechanisms and discounting.
• Publish reviews for verified purchases only.
• Develop a mechanism to prevent fraudulent reviews/ratings that misleads the customers.
  Notify the “business users” about any proposed changes in terms and conditions. However, these changes cannot be implemented before the expiry of the notice period.
• Add a general description of the main search ranking parameters, among other things, of the ecommerce platform ensure fair ranking mechanism.
• Note any possibility of influencing the ranking through direct or indirect remuneration paid by business users to the company.

In its report, CCI also asserted that it can step in and investigate deep discounting practices by ecommerce platforms. The statutory body also has the authority to scrutinise the contract terms between ecommerce companies and sellers.

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