SYLLABUS SECTION: GS III (ECONOMY)
WHY IN NEWS?
Recently, the Parliamentary Standing Committee on Commerce report on ‘Promotion and Regulation of E-Commerce in India’ recommended clear definition on e-commerce models and ensure that marketplaces don’t indulge in inventory-based models.
- Inventory model- an e-commerce activity where the inventory of goods and services is owns by an e-commerce entity and sold to the consumers directly
- Marketplace model – means providing a digital platform by an e-commerce entity on a digital & electronic network to act as a facilitator between buyer and seller. E.g.- Amazon, Flipkart etc.
Anti-competitive practices in the e-commerce marketplace include:
- lack of platform neutrality, i.e., providing preferential treatment to selected sellers,
- deep discounting, i.e., discounts of prefer sellers are selectively funds by the platform,
- non-transparent search rankings, and
- misuse of data.
- Marketplace-commerce entities should:
- not sell goods that it owns or controls,
- not have any direct or indirect relationship with sellers who sell on the platform, and
- be prohibited from licensing their brand to third party sellers on the platform.
- Prohibition of selective discounts and arbitrary classification of buyers and sellers on e-commerce platforms.
- Improve transparency in data handling and search rankings, it recommended that the government should to formulate a clear policy regulating the collection of data on the platform, its use and sharing of such data with third parties
- E-commerce platforms should publish their criteria for determining rankings, and disclose terms and conditions required to become a seller on the platform such as platform fee, commissions, and levies. Unilateral revision of these terms and conditions which can be detrimental to any stakeholder must be prohibited.
- Making necessary amendments to the Companies Act, 2002 for determining the abuse of dominant position in committee report on e-commerce.
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