
The Competition Commission of India (CCI) may investigate the unfair deep discounts and contract terms between e-commerce marketplaces and sellers. The commission on a case by case basis may intervene in matters where unfair conditions or price is imposed through contractual provisions by an enterprise that is dominant in the relevant market.
As per a market study on India’s e-commerce by CCI, “The Commission, under section 3(4) of the Act, can evaluate such vertical agreements in a rule of reason framework to assess whether the disparity in discounts offered is used as a mechanism to induce exclusivity and whether the same leads to an appreciable adverse effect on competition.”
The market study took place for nine months and it covered 16 online platforms and 164 businesses. It outlined outlined that any potentially anti-competitive unilateral conduct of platforms or platform’s vertical arrangements with sellers or service providers will receive enforcement attention.
The CCI’s study comes at a time when e-commerce companies, as well as food-tech firms, have come under government scrutiny over complaints of unfair practices by offline retailers and restaurants, respectively.
It also recommended self-regulation and to have clear policies on discounts, explaining the basis of the discount rates funded by platforms, and the implications of such schemes.
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