Moneycontrol
Last Updated : Oct 08, 2018 04:23 PM IST | Source: Moneycontrol.com

Big discounts by e-commerce firms under scanner, traders' body seeks new Act against predatory pricing

Traders' body CAIT last week urged the government to bring an Anti-Predatory Pricing Act to regulate and monitor e-commerce business in India.

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The discounts the e-commerce firms offering under sales such as Big Billion Days and the Great Indian Festival are  exciting consumers but conventional traders are opposing such discounts.

Traders' body CAIT last week urged the government to bring an Anti-Predatory Pricing Act to regulate and monitor e-commerce business in India.

The trader's body further said that various discounts being offered by e-commerce retailers in their respective different festival sales are nothing but predatory pricing adopted by these sellers.

It shows that instead of B2B they are indulged into B2C sales, which they are not allowed to do and is contrary to FDI policy of the government, the Confederation of All India Traders said.

It is high time that government should bring an Anti-Predatory Pricing Act to check such menace of e-retailers, the trader's body demanded.

Listening to their appeal, the corporate affairs ministry set up a 10-member panel last week to examine steep discounts in online retailing, reports The Mint. Also, e-tailers’ access to dealership from manufacturers and whether they are subject to any restrictions.

In March 2016, 100 percent foreign direct investment (FDI) was allowed in online retailing of goods and services. The move was to validate existing businesses of e-commerce companies operating in India.

But Retailers Association of India (RAI) and the All India Footwear Manufacturers and Retailers Association (AIFMRA) in 2015 argued this in the Delhi High Court. According to them, e-commerce firms had undue advantage due to the FDI as they could offer huge discounts to the consumers. They also said that giving such discounts is not possible for traditional retailers.

This year in August when companies like Amazon, Flipkart, Paytm Mall were advertising big discounts, Competition Commission of India (CCI) raised objections. It had also said that “Flipkart and Amazon are running foul of current FDI rules that forbid discounting.

(With inputs from PTI)
First Published on Oct 8, 2018 10:49 am
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