CCI initiates market study on e-commerce

The Competition Commission of India (CCI) has initiated a study on e-commerce to gather information and insights from market participants in goods and services.

The study includes sectors like mobile, grocery, food, electronic/ electrical appliances, lifestyle and hotels.

According to the interim findings, restaurant owners, online platforms, hotels, online travel agencies, sellers and e-marketplace places raised their concerns related to discounts, commission and algorithm issues.

Vendors or sellers said that e-commerce platforms give preferential treatment to certain sellers; there is a high search ranking for preferred sellers; and they feel compelled to participate in discounts.

On the other hand, e-commerce market place players have said that the sellers are independent third party players; sellers participate in deals at their own discretion; search ranking of sellers is based on algorithms; and there is a mechanism in place to deal with unauthorised vendors selling counterfeit products.

Similarly, the hotel industry argued that they are forced to set unviable rates because of discounts by online travel operators.

They also informed CCI that they see unilateral increase in commissions by online tour operators, and the search ranking algorithm is opaque.

Online tour operators have said that prices are determined by hotels, and they offer discounts above listed room price.

In the food sector, restaurants have said that deep discounts by online platforms "cannibalising dine in" and the burden on discounts is shifting to restaurants.

They have also noted that online food platforms arbitrarily increase commissions and compelled them to use their manpower.

Whereas online food platforms stated that restaurants participate in discount schemes at their own discretion; and commissions are decided based on mutual negotiations and there is no restriction on use of manpower.

The CCI sought views of all stakeholders by September 30 as the study is still on.

The interim findings were shared during a CCI's workshop on e-commerce - changing competition and landscape in India.

"It is part of an exercise as part of a market study on e-commerce being conducted by CCI," its chairman Ashok Kumar Gupta said.