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'E-tailer group cos may not influence goods or services prices'

E-tailer group cos may not influence goods or services prices

New Delhi: Any group company of an online retailer or marketplace may not be allowed to directly or indirectly influence the price or sale of products and services on its platform, a move that could completely restrict e-tailers from giving deep discounts. The recommendation is part of an initial draft circulated among stakeholders for discussion to frame a national e-commerce policy.

The draft has also suggested to introduce a pre-set timeframe for offering differential pricing or deep discounts by e-commerce players to customers. The suggestions are part of the strategy to address anti-competitive issues in the e-commerce sector effectively.

"The restriction imposed on e-commerce marketplace, to not directly or indirectly influence the price of goods and services, would be extended to group companies of the e-commerce marketplace. "A sunset clause, which defines the maximum duration of differential pricing strategies (such as deep discounts) that are implemented by e-commerce platforms to attract consumers, would be introduced," it said.

Further the draft recommended to permit 49 per cent foreign direct investment (FDI) in inventory-based business-to-customer model of e-commerce. Currently, FDI in such businesses is prohibited and it is allowed only in marketplace model.

It stated that sale of country-made goods through online platforms would be promoted by permitting limited inventory-based business-to-customer model, where 100 per cent made in India items would be sold through Indian owned e-retail companies.

The initial draft has also talked about adopting a common definition of e-commerce for the purpose of domestic policy making and international negotiations as currently there is no commonly accepted definition. At present, industry ministry, consumer affairs, department of IT, WTO, OECD and UNCTAD have separate definitions.

The draft has proposed that "e-commerce may be understood to mean buying, selling, marketing, selling, marketing, distribution, or delivery of goods, services and digital products (like e-music, e-books, software) through electronic means".

It also called for steps to develop capacity for and incentivise data storage in India though creation of facilitative data infrastructure. The incentives could include according infrastructure status to data centres and server farms besides extending tax benefits and rebate in customs duties.

The draft said that the development of cutting-edge and innovative technologies in India would be promoted by ensuring access to data. In context of international trade negotiations, policy space for granting preferential treatment and imposing customs duties on e-transmission to digital items created in India would be retained.

Further, it recommended steps for increasing use of Rupay. The steps could include identifying deficiencies in infrastructure, providing budget, branding, and addressing quantitative deficiencies in service for wider use of Rupay.

It suggested to set up a 'social credit database' through PPP to promote digital lending and use of blockchain technology for further financial inclusion. To enhance participation of MSMEs in e-commerce, it has called for several steps including setting up of e-retail platform, addressing issues of financing for online participation, incentivising platforms and aggregators to engage MSMEs.

The initial draft has recommended the Competition Commission to consider amending some threshold rules to mandatorily examine competition-distorting M&As below the existing 'de minimis' level.

E-commerce companies may be asked to mandatorily make full disclosure to the consumer regarding the purpose and use of data in a simplified way, and also share main features of their terms and conditions besides disclosing clauses governing their arrangement with the vendors.

It has also suggested setting up of a central consumer protection authority to act as a nodal agency for intra-government coordination, mandatory registration of all e-commerce operators, registration of complaints. "The legal framework governing unsolicited commercial SMSs and calls would be strengthened," the draft stated.

Team MP

Team MP

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