Compliance And Control

Context: New e-commerce rules expand govt role in the business.

Significance of  the new latest amendments

• Geared towards more compliance:
  • The e-commerce platforms have to register themselves with the Department of Industry and Internal Trade.
  • Appoint a chief compliance officer as a nodal point for law enforcement agencies.
• Protecting the interest of domestic retailers:
  • Flash sales — a hugely popular mechanism online — have been prohibited if they are back-to-back, limit customer choice, and prevent a level playing field.
  • Restrictions have also been extended to “related parties and associated enterprises”, and under the new rules, no related entity can sell goods to an online seller operating on the same platform.

Complaints against the foreign retailers:

• Business concentration: Internal documents from Amazon showed that just 35 of the 400,000-odd sellers on its platform account for two-thirds of sales, suggesting that it extends preferential treatment to a handful of sellers.
• Inadequacy of country of origin provision: Identifying goods based on “country of origin” will not offer domestic manufacturers a better deal unless consumers are driven by patriotism rather than value.
• Ignores B2B competition: e-tailers are subject to rules that do not apply to their domestic brick and mortar competitors.
  • Most offline retailers have preferential agreements with a handful of sellers who offer them better terms — this is the basic nature of B2B competition.
  • Most of them derive an increasing amount of revenues from their private label sales that get a preferential display on their shop shelves.