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COMMITTEE REPORT ON E-COMMERCE

UPSC CURRENT AFFAIRS | STANDING COMMITTEE REPORT ON E-COMMERCE | 27TH JULY | PRS

/ July, 2022, UPSC Daily Current Affairs

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.

Issues:

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.

Recommendations:

  1. 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.
  1. Prohibition of selective discounts and arbitrary classification of buyers and sellers on e-commerce platforms.
  2. 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
  3. 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.
  4. 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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Source: PRS