Govt’s ham-handed action against Snapdeal to hurt biz, says Sachin Pilot

Slamming "ham-handed enforcement" action against e-commerce major Snapdeal for online sale of prescription drugs, former Union Minister Sachin Pilot today said the move goes against the government's stated position of promoting businesses and home-grown entrepreneurs.

Pilot also said that the action against Snapdeal and its top management was "akin to holding highway builders responsible for lane violations", while the real perpetrators are freely peddling drugs of dubious nature. The comments from the Congress leader, who was Minister for Corporate Affairs in the previous UPA government, follows Maharashtra's Food and Drug Administration (FDA) clamping down on Snapdeal with filing of FIR against the e-retailer's CEO Kunal Bahl and other top management personnel for alleged online sale of prescription drugs on its platform.

Pilot, who had voiced concern in the past during his tenure as Union Minister about arrest of direct-selling major Amway's CEO and other top executives in India, said it is no one's case that prescription drugs should be sold in a manner that is contrary to law. However, "action of Maharashtra FDA against Snapdeal and insinuations of similar actions against Flipkart and Amazon must make us all sit up and take notice," he said.

Pilot said that law enforcement agencies must be clear about whom to act against and e-commerce portals were merely enabling platforms for buyers and sellers. Pilot, who had also served as Minister of State for Communications and Information Technology in the previous government, said there is a need to bring out comprehensive guidelines for e-commerce, that balance liability with 'safe harbour' provisions." These provisions would require the definition of Internet Service Providers to include e-commerce portals, oblige them to take reasonable precautions against misuse of their platform for illegal transactions, and protect bona fide conduct of their businesses while acting against the real perpetrators, he emphasised.

"The ham-handed enforcement that seeks to involve top management without first ascertaining their involvement in operational detail, making directors accused without examining the role of the company boards in such decisions, and jeopardising entire businesses over ambiguity in a few product lines is contrary to the stated aims of this government to promote business," he added.

With the present government's lack of clarity, Pliot said the message that we now risk sending out is that we are taking the stick to our home-grown Internet entrepreneurs and multinationals without understanding the gap between technology-enabled businesses and policy and regulatory frameworks required to subject them to enlightened regulation.

"If regulatory compliance for every item retailed on these sites -- Amazon alone sells products across millions of product categories -- were to be the responsibility of these e-commerce portals, it would shut down their businesses. This is akin to holding highway builders responsible for lane violations," Pilot said. 

The Congress leader said that the emergent e-commerce sector is taking retail to the next dimension and it grew at a compounded annual growth rate of 50-55 per cent per year in goods and at 20-24 per cent in services between 2014 and 2019. "Internet contributes USD 60 billion to our GDP. E-commerce alone would contribute this much by 2019. It is attracting huge investments from international investors. It is also a technology driven endeavour, persuading the best talent in the field to stay on in the country and encourages many to relocate from overseas," he added.