Both e-commerce & physical retail need support – The Tribune
Summary
Sushma Ramachandran
Senior Financial Journalist
BIG Tech is coming under attack all over the world for various reasons. The tentacles of regulatory agencies in the US and the European Union as well as Australia and China are now tightening their grip over these multinational players. The reasons are multifar…….
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Sushma Ramachandran
Senior Financial Journalist
BIG Tech is coming under attack all over the world for various reasons. The tentacles of regulatory agencies in the US and the European Union as well as Australia and China are now tightening their grip over these multinational players. The reasons are multifarious. The concerns range from harmful content in Australia to China fining its own internet giants like Alibaba for violating anti-monopoly laws. Lawmakers in the US interrogated executives of the four Big Tech companies on anti-trust issues last year while the European Union has already levied hefty fines on some while continuing investigations against others in similar areas.
India has been having its own battles with Big Tech in recent times. The latest area of conflict, however, may end up being the most path-breaking as it involves the high-value area of e-commerce and a clash with the country’s vast brick and mortar retail network.
This follows the issuance of a new set of draft rules for e-commerce a few months ago. One of these related to the question of unfairly competing with third-party sellers by using privileged data available to the e-commerce platform, an issue flagged by the European Commission as well.
While this continues to remain an issue of concern, the draft rules go much further on marketing and even curb steep discounts. They also stipulate that companies associated with the online marketplaces cannot be present on the site. This has naturally evoked a sharp reaction from e-tailers, not just Amazon and the Walmart-owned Flipkart, but also homegrown players like the Tatas and Reliance, which have big e-commerce plans.
The plethora of conditions has even spurred internal strife within the government, with different agencies taking varying stances. The validity of the new rules issued by the Consumer Affairs Ministry is being questioned by the Finance Ministry and the Niti Aayog, with the Prime Minister’s Office likely to become a mediator.
Common to all the objections, however, is the idea that the rules not only represent an overreach in trying to protect brick-and-mortar retailers, but also they are not in the consumers’ interests. Which is a surprise, given that the proposals emanate from the Consumer Affairs Ministry.
A case in point is the provision to curb what are known as “flash sales” or heavy discounts on e-commerce marketplaces. These are usually carried out for mobile phones, thus worrying the cell phone manufacturers. The reasons for clamping down on such sales are not clear, barring the obvious one of trying to placate retailers in the physical space.
Consumers’ interests cannot be served by denying them opportunities to buy mobile phones at cheaper rates. And this becomes important at a time when the country is marching inexorably towards digitisation. The pandemic has created a scenario in which the mobile phone has transformed into an essential …….
Source: https://www.tribuneindia.com/news/comment/both-e-commerce-physical-retail-need-support-342026