The Competition Commission of India (CCI), in a report released on January 8, 2020, has suggested that online marketplaces should come up with clear and transparent policies on discounts provided on products on their platforms.“Bring out clear and transparent policies on discounts, including inter alia the basis of discount rates funded by platforms for different products/suppliers and...
The Competition Commission of India (CCI), in a report released on January 8, 2020, has suggested that online marketplaces should come up with clear and transparent policies on discounts provided on products on their platforms.
“Bring out clear and transparent policies on discounts, including inter alia the basis of discount rates funded by platforms for different products/suppliers and the implications of participation/non-participation in discount schemes,” the CCI said in the ‘Market Study on E-Commerce in India’.
The suggestion gains significance as discounts on online platforms have been a long disputed matter among both conventional offline traders and the e-commerce majors. Traders of brick and mortar shops have been protesting under the aegis of the Confederation of All India Traders (CAIT) against what they call “deep” discounts on e-commerce platforms, more so, during the festive seasons which these e-commerce platforms organize.
According to the traders’ body, the discounts on the online platforms such as Amazon and Flipkart are predatory in nature and the government should ensure price parity in online and offline markets.
Regarding data privacy of customers, the anti-trust body asked the online platforms to bring out a transparent policy on data collected.
The CCI said that adequate transparency over user review and rating mechanisms is necessary for ensuring information symmetry, which is a prerequisite for fair competition. It stated that the e-commerce platforms should maintain adequate transparency while publishing and sharing user reviews and ratings with the business users. Reviews for only verified purchases have to be published and mechanisms should be devised to prevent fraudulent reviews/ratings. According to the CCI such rating mechanisms are necessary for ensuring information symmetry, which is a prerequisite for fair competition.
The aim of the CCI is to foster sustainable business relationships between all stakeholders.
The CCI also notified the e-commerce platforms to bring out clear and transparent policies on discounts, including inter alia the basis of discount rates funded by platforms for different products/suppliers and the implications of participation/non-participation in discount schemes.