CCI to monitor e-commerce platforms for the deep discounts offered during festive season

E-commerce platforms such as Amazon and Flipkart, are geared up to launch big sales in the upcoming festival period and would be offering consumers significant discounts on products during the sale period. The traders’ body – Confederation of All India Traders (CAIT) has opposed the move by seeking a blanket ban.

Competition Commission of India (CCI), the country’s competition regulator is closely watching the issue of deep discounting by e-commerce players as it gears up to deal with possible anti-competitive behaviour in the sector. The CCI has initiated a study into the practices of the ecommerce sector and a report on the interim findings has also taken into account the grievances of small businesses.

According to CCI, deep discounts could make some businesses unviable as it erodes the value of products and services in the mind of the consumer if done for extended periods. CCI is building expertise to deal with cases involving e-commerce players. However, the CCI will balance the interest of both online platforms and small businesses.

The aspect of deep discounting was also actively deliberated in the workshop on e-commerce organized by CCI, wherein players who are listed on platforms such as those for online food delivery, hotel booking and retail shopping highlighted their concerns according to Ashok Kumar Gupta, Chairperson of the CCI. He further highlighted the concerns of small restaurants, retailers and hotels who say they are being forced to heavily discount their products and services to compete with ecommerce companies.

Restaurants have also asked online food aggregators to take a relook at their deep discounting practices, while retailers have asked the government to ban upcoming festive sales by Amazon and Flipkart over alleged violations of foreign direct investment (FDI) norms.

According to Flipkart, traders on its platform eagerly awaited the festive event as an opportunity and a landmark moment in their financial year. According to Rajneesh Kumar, Chief Corporate Affairs Officer at Flipkart the “Big Billion Days” is set to be a huge celebration for the whole country and Flipkart is sure that it will serve as an impetus for consumption and demand.

Amazon India highlighted the opportunities offered to the 500,000 sellers on its platform and said that sellers had sole discretion in setting product prices.

Ashok Kumar Gupta, Chairperson of the CCI also said that the CCI was working with the Government e-Marketplace (GeM) to create software to flag tenders where rigging of bids is suspected. The CCI has already conducted two raids this year in cases involving bid rigging in government tenders.