Govt panel set to probe e-tail­ers’ big dis­counts


Are­view of the com­pe­ti­tion law seeks to find out whether the steep dis­counts of­fered by e-tail­ers pro­motes com­pe­ti­tion or sti­fles it as al­leged by off­line re­tail­ers.

A 10-mem­ber panel set up by the cor­po­rate af­fairs min­istry last week will ex­am­ine the trends in dig­i­tal com­merce, in­clud­ing steep dis­counts, and whether the e-tail­ers have re­stricted ac­cess to deal­er­ships from man­u­fac­tur­ers.

Con­ven­tional re­tail­ers are strongly op­posed to dis­counts of­fered by on­line sell­ers ar­gu­ing that it is aimed at dis­plac­ing off­line deal­ers and will even­tu­ally af­fect con­sumer in­ter­est. “Prac­tices in the dig­i­tal econ­omy, back­log of com­pe­ti­tion cases to be re­solved and the fee struc­ture fol­lowed by the Com­pe­ti­tion Com­mis­sion of In­dia will be re­viewed by the panel,” one per­son privy to the ini­tial con­sul­ta­tion process, said on the con­di­tion of anonymity. The panel will also comb through cen­tral and state gov­ern­ment poli­cies that do not foster prin­ci­ples of com­pe­ti­tion in let­ter and spirit.

Brick-and-mor­tar traders are also ready­ing their rec­om­men­da­tions to the panel seek­ing to put an end to dis­counted on­line sales. “We strongly op­pose dis­counts of­fered by on­line re­tail­ers. These are not dis­counts but preda­tory pric­ing. We will be re­quest­ing the com­merce min­is­ter to im­pose a blan­ket ban on dis­counted sales by on­line sell­ers, which cre­ates un­even play­ing field and is detri­men­tal to tra­di­tional re­tail­ers and man­u­fac­tur­ers. We are for­mu­lat­ing our views and will sub­mit it be­fore the re­view com­mit­tee,” said Praveen Khan­del­wal, sec­re­tary gen­eral, Con­fed­er­a­tion of All In­dia Traders (CAIT).

Com­pe­ti­tion law ex­perts said that in­dus­try prac­tices, such as man­u­fac­tur­ers im­pos­ing re­stric­tions on on­line sell­ers to pro­tect con­ven­tional deal­ers have been a sub­ject of dis­pute. In cases where cer­tain brands face in­tense com­pe­ti­tion from ri­val brands, re­stric­tions im­posed by a pro­ducer on on­line deal­ers to pro­tect its con­ven­tional deal­ers may not be seen by the com­pe­ti­tion watch­dog as anti-com­pet­i­tive. This, how­ever, en­ables pro­duc­ers to con­trol the re­tail price and may not be in the in­ter­est of con­sumers.

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