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CAIT claims that there are currently multiple electronic commerce companies are being controlled by various entities, which results in a fragmented approach that is confusing different stakeholders

The domestic body of traders, the Confederation of All India Traders (CAIT), has demanded the establishment of a specialized regulator in e-commerce to safeguard the interests of small companies and traders.

According to the trader’s body, various e-commerce companies are currently being controlled by various entities, resulting in a fragmented approach that has created confusion between different parties.

With the rapid growth of this industry and its distinct particular issues, CAIT has recommended the establishment of a regulator in the e-commerce policy, which is in the process of being finalized in the hands of the Government.

“Owing to the technicality of e-commerce platforms, and the web of several stakeholders with different concerns, it is desirable to have such a regulator to implement the inclusive e-commerce policy, which would have ex-ante regulations to be applicable in the e-commerce segment, for the benefit of the entire ecosystem,” CAIT secretary general Praveen Khandelwal stated when he released an e-commerce white paper on Tuesday.

The regulator is supposed to make it clear to marketplaces that they should not offer discounts since it could have the effect of being discriminatory and distorting.

The e-commerce market is subject to the Foreign Direct Investment Policy, Competition Act 2002. Consumer Protection Act, 2019 and E-Commerce Rules, 2019, Information Technology Act, 2000.

The white paper includes 27 recommendations to the Government into the proposed e-commerce policy and nine recommendations for changes planned for the consumer protection laws regarding the internet.

The Government should address problems arising from a non-neutrality of platforms over-discounting inefficient use of data. “The e-commerce policy should give a due weightage to concerns above while formulating the way ahead for the industry,” the white paper stated. The white paper also stated that the policy on e-commerce should instruct marketplaces not to offer discounts, as it can have the effect of being discriminatory and distorting.

The publication of this white paper takes place against the background of the Government’s process of preparing the e-commerce policy. The department for the industry is conducting inter-ministerial meetings to finalize the national e-commerce strategy that will outline the obligations of marketplaces and sellers, and consumers and ensure that they can make an informed decision before purchasing the product. The Ministry of Consumer Affairs has proposed a new list of rules for retailers in June. Although the ministry has concluded stakeholder consultation, the rules are still to be completed.

It is interesting to note that both sets of rules have yet to be adopted by the respective departments of Government. Any changes in policy or the introduction of a brand new rule or policy have been criticized for making compliance more difficult for companies that sell online or being too strict. In reality, around one year back, DPIIT had internally proposed the creation of an authority for the e-commerce sector. However, it was rejected by a majority of ministers in inter-ministerial discussions.

According to CAIT, the e-commerce market is dominated by a few large platforms and a handful of large sellers, which are usually associated with the platforms. This puts small sellers in a difficult situation, decreasing their exposure in the marketplace. While the market for eCommerce has increased, smaller sellers haven’t seen the benefits in the same way. This is why it is crucial to develop a strategy for e-commerce that is focused on all stakeholders, as was stated.

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