E-commerce major Flipkart is allowing sellers on its platform to change prices of items once again, after a gap of about 40 days, following an exclusive report by Moneycontrol earlier this week which highlighted their plight.
“I had declared stock-out on Flipkart for my highest selling product as my cost price had increased, but selling price could not be changed. Now, I have resumed selling with a higher price, although I am still working on thin margins,” said a copperware seller on the platform on the condition of anonymity.
Many small sellers on the Walmart-owned marketplace were not able to change the prices of their listings since the platform changed its rate card for commissions in May.
Sellers had made two accusations against the restriction on price changes — firstly, they said that such a move violated India’s foreign direct investment (FDI) policy which clearly forbids e-commerce marketplaces from influencing prices.
They also alleged that the move was discriminatory as bigger sellers were not subjected to it — and hence was anti-competitive.
"We are compliant with all FDI regulations and do not influence pricing. As a homegrown e-commerce marketplace, Flipkart stands steadfast in its commitment to adapting and evolving in sync with our sellers' requirements... The all-new simplified rate card policy is aimed at optimising growth avenues for sellers while enhancing settlement transparency. As a marketplace, we strive to democratise access to resources, ensuring all sellers have access to our robust seller support system designed to provide needed assistance," a Flipkart spokesperson had said in response to Moneycontrol's queries for our report on June 27.
According to sources close to the developments, Flipkart might have prevented price changes as a strategy to force sellers to pass on the benefits of lower commissions — charged to sellers in its new rate card — to consumers.
While bringing the new rate card last month, the company said that it has been simplified from four components (fixed commission, collection, shipping) to two (fixed & commission), with the aim of enhancing settlement transparency.
Sellers argued that the platform restricted price changes from the midnight of May 18, when the new rate card came into effect. They claimed that Flipkart did not give them time to adjust to the new rate card and determine whether they could indeed pass on the benefit of lower commissions to their customers or not.
“If smaller sellers are not able to change prices vis-à-vis bigger players and their pricing is being dictated, it is surely an abuse of dominant position by Flipkart. It would then be an anti-competitive practice,” said Salman Waris, Partner at technology-focussed law firm TechLegis.
“The FDI circular of 2020 says that e-commerce entities providing a marketplace will not directly or indirectly influence the sale price of goods or services and shall maintain a level playing field. It is a violation on two fronts if Flipkart is dictating prices and also allowing bigger players to change prices while not allowing smaller ones to do it," he added.
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