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Parliamentary Standing Committee Report on E-commerce

GS Paper 3

Syllabus: Liberalisation after 1991

 

Source: Rajya Sabha

Context: Recent report of the committee “Promotion and Regulation of E-commerce in India”

(Note down 2-3 suggestions from the report and understand the difference between various models of e-commerce)

Issues highlighted by the report:

  • Few platforms control a large part of the e-commerce market (which may lead to monopoly)
  • Lack of platform neutrality, i.e., providing preferential treatment to selected sellers
  • Deep discounting,e., discounts of preferred sellers are selectively funded by the platform
  • Non-transparent search rankings
  • Misuse of data

Recommendations:

  • Formulate a policy which clearly defines marketplace and inventory-based models of e-commerce.
  • It recommended that marketplace-commerce entities should:
    • not sell goods that it owns or controls
    • not have any direct or indirect relationship with sellers who sell on the platform
    • be prohibited from licensing their brand to third-party sellers on the platform
  • Gatekeeper entities: Certain e-commerce platforms need greater scrutiny (as is applicable in other countries): It recommends India should select “gatekeeper” platforms of a specific scale that require more stringent supervision.
  • Mandatory registration of e-commerce companies with DPIIT
  • Create Digital Market Division to overcome regulatory gaps
  • Implement the Personal Data protection bill (2019)
  • DPIIT should address issues such as maintaining a level playing field between small businesses and e-commerce giants and provide technical support to small and local businesses.
  • Obligations put on e-commerce entities through Consumer Protection (E-Commerce) Rules, 2020(such as the appointment of the chief compliance officer, and setting up a grievance redressal mechanism) should be applicable to those entities above a certain threshold.
    • It puts a compliance burden on new e-commerce entities.

Insta Links

Sansad TV: Parliamentary report on E-commerce

 

Practice Questions

Q.With reference to foreign-owned e-commerce firms, operating in India, which of the following statements is/are correct? (UPSC 2022)

  1. They can sell their own goods in addition to offering their platforms as market-places.
  2. The degree to which they can own big sellers on their platforms is limited.

Which of the above statements are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Answer: B

As per the FDI policy changes, foreign firms are prevented from holding inventory or selling their own goods, which both Amazon and Walmart do in other markets. They can offer their platforms only as “marketplaces” for other buyers and sellers.

2nd statement is true, the degree to which they can own big sellers on their platforms is limited (to maintain a level playing field)