Daily Management Review

India Drafts New e-Commerce Policy Demanding Equal Treatment Of Sellers By Platforms


India Drafts New e-Commerce Policy Demanding Equal Treatment Of Sellers By Platforms
A new draft policy e-commerce firms prepared by the Indian government will mandate that such companies follow a policy equal treatment of sellers on their platforms while also ensuring transparency. This draft policy paper was prepared after there were criticisms of the business practices by the bog players in the e-commerce industry in the country.
Following complaints from from brick-and-mortar retailers about big e-commerce firms like Amazon and Walmart's Flipkart regularly breach federal regulation, the Indian government has been drafting this new e-commerce policy for months now. Such allegations have however been denied by the companies.
But according to a Reuters report on the industry in India published last month, preferential treatment to a small group of sellers on its India platform has been extended by Amazon for years now while also using the sellers to bypass the foreign investment rules of the country. The report was based on internal Amazon documents dated between 2012 and 2019. According to the report, the documents showed that a small number of sellers prosper on Amazon’s India platform because of close help by the e-commerce giant. Amazon gave the companies discounted fees, while also helping them to strike special deals with big tech manufacturers. The report carried a statement from Amazon on the issue in  which it said that the company "does not give preferential treatment to any seller on its marketplace," and that it "treats all sellers in a fair, transparent, and non-discriminatory manner."
Operators will have to be completely impartial in their dealings with sellers, says the latest draft of the policy document. "E-commerce operators must ensure equal treatment of all sellers/vendors registered on their platforms and not adopt algorithms which result in prioritizing select vendors/sellers," the draft of the new regulation says.
No comments were however available from the country’s commerce ministry which was is behind this draft. In addition to being applicable to Amazon and Flipkart - two top e-commerce players in India, this new regulation will also be equally imposed on domestic e-commerce firms such Reliance Industries, which has announced its plans of expansion of its online retailing platform JioMart.
No comments on the news reports of the drafted new rules were available from any of the three companies named above.
Reports also said that the Indian government was also contemplating bringing in changes to the foreign investment regulations in the country which could prod online retailing companies like Amazon to restructure their ties with some major sellers. According to reports quoting people with direct knowledge, meetings and negotiations are to be held in the coming weeks between government officials and industry executives about the proposed rules. Reports also claimed that the e-commerce policy was discussed on Saturday by top government officials from various departments, including the commerce ministry.
Reports also said nothing about the possible time line of application of the new regulations.