Government To Lay Down Competition Guidelines For E-Commerce Firms

The government will lay down competition related guidelines for e-commerce firms such as Flipkart, Amazon, Swiggy, Zomato and others wherein market share, merger and acquisition and cross-holding caps will be fixed, according to a report by FE.

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The thinking in the government is that intermediaries should be categorized in terms of their characteristics. For instance, social media, as an intermediary, has different characteristics and different impacts on a consumer, than e-commerce and digital media. So all these should not be seen through one lens but through multiple streams of regulation, stated the report, citing the sources involved in the drafting of regulations.

“Today there’s a lot of ad-hocism. Some aggrieved party approaches Competition Commission of India and the anti-trust regulator then decides whether the practices against which complaint has been made is anti-competitive or not. All this will change once the guidelines are put in place,” added the report quoting the sources.

The guidelines will also look into aspects like merger and acquisitions between two e-commerce firms in the same space, how much market share can such a merged entity have, what kind of cross-holdings can there be between two or more players.

“These are early days and the matter is on the drawing board. A public consultation will be done to seek stakeholders’ comments before the government proceeds to finalise such guidelines,” said the sources as per the report.

It is also added that regulating e-commerce intermediaries on grounds of only misinformation is not enough as they need to be regulated on grounds of competition also.

Currently, as per reports, the information technology rules regulate only social media platforms like Twitter, Facebook, Instagram etc. It added that there are also regulatory guidelines for over-the-top players like Netflix, Amazon Prime Video etc.