Lok Sabha Question No. 491 (UNSTARRED), answered on 2020-02-05
Subject: Regulation of Online Retailers
Ministry: COMMERCE AND INDUSTRY
Asked by: Dayanidhi Maran

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE

## LOK SABHA

## UNSTARRED QUESTION NO. 491. TO BE ANSWERED ON WEDNESDAY, THE 05 TH  FEBRUARY, 2020.

## REGULATION OF ONLINE RETAILERS

## 491.   SHRI DAYANIDHI MARAN:

Will the Minister of COMMERCE AND INDUSTRY be pleased to state:

वाणिज्य

## एवं उद्योग मंत्री

- (a) the  details  of  the  efforts  being  made  by  the  Government  to  control  or  ban online retailers like Amazon;
- (b) whether any enquiry is going to be conducted on Amazon on its huge losses in the course of its operations in India;
- (c) whether the Ministry is aware of the predatory pricing of Amazon and if so, the details of the steps being taken to control the same; and
- (d) whether the Ministry is aware of similar predatory pricing in the telecom sector and if so, the details of the steps being taken to control the same?

## ANSWER वाणिज ् य एवं उद्योग मंत्री ( श्री पीयूष गोयल ) THE MINISTER OF COMMERCE & INDUSTRY (SHRI  PIYUSH GOYAL)

- (a) & (b): Considering the potential of e-Commerce, Government of India plans to  encourage it  to  contribute  towards  India's  proposed  US  $  1  trillion digital  economy.  However,  e-Commerce  companies  having  foreign investment  can  operate  only  a  marketplace  model  and  there  are restrictions on the inventory based model of e-Commerce. In order to clarify  the  same,  Department  for  Promotion  of  Industry  and  Internal Trade (DPIIT), vide Press Note 3 of 2016, issued guidelines for FDI in e-Commerce  on  29  March  2016.  However,  allegations  were  made against e-Commerce companies that the marketplaces were violating the norms laid down in Press Note 3 of 2016. With a view to clarify the already existing policy framework, Press Note 2 of 2018 was issued by DPIIT  on  26  December  2018  to  provide  further  clarification  on  FDI Policy in relation to e-Commerce companies. Through the latest Press Note  2  of  2018,  Government  has  reiterated  the  policy  provisions  to ensure better implementation of the policy in letter and spirit. Further, Clause (ix) of Press Note 2 of 2018, stipulates that e-commerce entities providing  marketplace  will  not  directly  or  indirectly  influence  the  sale price  of  goods  or  services  and  shall  maintain  level  playing  field.

Services  should  be  provided  by  e-commerce  marketplace  entity  or other  entities  in  which  e-commerce  marketplace  entity  has  direct  or indirect  equity  participation  or  common  control,  to  vendors  on  the platform at arm's length and in a fair and non-discriminatory manner. Such  services  will include  but not limited to fulfilment, logistics, warehousing, advertisement/ marketing, payments, financing etc. Cash back  provided  by  group  companies  of  marketplace  entity  to  buyers shall  be  fair  and  non-discriminatory.  For  the  purposes  of  this  clause, provision of services to any vendor on such terms which are not made available  to  other  vendors  in  similar  circumstances  will  be  deemed unfair and discriminatory. Further, if any violation is reported necessary action may be taken by the competent authority.

- (c): Representations have  been  received  in  this  Department  alleging  that some e-commerce platforms are engaged in predatory pricing and are providing  excessive  discounts.  The  extant  Foreign  Direct  Investment (FDI) policy on e-commerce sector, inter-alia, specifies that e-commerce  marketplaces  will  not  directly  or  indirectly  influence  the sale price of goods or services and shall maintain a  level playing field. These representations are under examination. However it is reported that  the  Competition Commission of India (CCI) has recently ordered investigation  against  FlipKart  Internet  Pvt.  Ltd.  and  Amazon  Seller Services Pvt. Ltd. in order to determine whether the alleged exclusive arrangements, deep-discounting and preferential listing are being used as an exclusionary tactic to foreclose competition under section 26(1) of Competition Act, 2002 vide Order 40 of 2019 dated 13.01.2020.
- (d): This Department  is  not aware  of  any complaint received  about predatory pricing in telecom sector.

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