Government tries to nail key issues: Here are 10 takeaways from draft e-commerce policy  

E-commerce | Representative image (PC-Shutterstock)

Cutting the cat and mouse chase, the government for once and all has tried to address the core issues blistering the e-commerce segment in the most detailed way possible. In a 14-page draft policy, it has tried to address some core issues such as preferential treatment given to select sellers, country of origin and definition of related parties to bring a level playing field for the online and offline players in India.

Here are some of the key proposals of the draft:

-- The e-commerce companies will have to ensure that none of its related parties are listed as sellers for sale to consumers directly. The companies have been categorically told that they will have to ensure that nothing is done by related parties which they themselves are prohibited to do.

-- Companies will be termed related parties if they have 10 percent or more common ultimate beneficial ownership.

-- Enterprises will also be considered related to each other through a common chain of directors or managing partners, shareholders, where such shareholders hold not less than 5 percent of the shareholding in the related enterprises.

-- No marketplace e-commerce entity shall sell goods or services to any person who is registered as a seller on its platform. This clause essentially bars e-tailers from running wholesale businesses through which they are alleged to be selling subsidised goods to their preferred vendors. These vendors in turn sell the goods to customers through the marketplace at a discounted price.

-- While the existing norms prohibit etailers from directly or indirectly influencing the price of goods, companies have often been seen circumventing the laws. They subsidise commissions to lure sellers into offering discounts on their platforms. These practices are more prevalent during festive season sales. To bring a closure to this end, the government has proposed that no e-commerce company shall advertise a body of sellers for the purpose of subsidizing a sale on its platform.

-- E-tailers are often engaged in selling private label products on their platforms. Smaller vendors have often alleged that companies extract the data for best selling products and then themselves get into these businesses via means of private label products. The draft now bars e-commerce companies from using any information collected through its platform for unfair advantage of its related parties and associated enterprises.

-- The government has also said that e-commerce companies will now mention the name and details of any importer from whom it has purchased such goods or services. They will also have to provide a filter mechanism on their websites from where customers can figure out the origin of the products quickly before making a purchase.

--In a major push for domestic products, it has also suggested that the companies should provide alternative suggestions to customers before she make a purchase to ensure fair opportunity for "domestic goods".

-- The draft has proposed that e-commerce companies will also not be allowed to organise flash sale of goods bringing under question a lot of sale festivals organised throughout the year by etailers such as Amazon and Flipkart.

-- The rules also forbids e-commerce companies from displaying any misleading advertisements.