Union minister Piyush Goyal has said that many of the e-commerce companies that have come to India “very blatantly” violate the rules of the country.
“Many of these large ecommerce companies have come into India and very blatantly flouted the laws of the land...in more ways than one,” he told a virtual event hosted by the Stanford India Policy and Economics Club on Saturday. “I’ve had several engagements with these large companies...particularly the American ones. I can see a little bit of an arrogance...and their ability to finance large amounts of money in the initial stages to try and capture the Indian market or larger part of the Indian market particularly in certain products...to the detriment of mom-and-pop stores.”
The Indian minister said that the e-commerce companies were using their access to a large amount of low-cost capital to carry out predatory pricing practices. Goyal, however, did not name the companies he was talking about or specify which laws had been violated.
Goyal also criticised e-commerce companies for what he called “forum shopping” in Indian courts and for their failure to comply with the Competition Commission of India. “...if they have nothing to hide, if they are doing honest business practices, why don’t they respond to the CCI?” Goyal said.
Amazon and Flipkart have challenged a Karnataka High Court order, allowing the Competition Commission of India to inquire both the companies over predatory pricing and deep discounting.
The minister on Saturday said that the big Indian market welcomed all entities to participate, however, they must work within the rules and laws of the country.
“So, I think it will be good that all companies follow the law of the land and do not use muscle power or money power to try and hurt Indian interests,” Goyal added.
He also cited examples from Australia and the United States to point out that other countries were also “waking up to the reality of these large tech and big e-commerce companies”.
On June 21, the Indian government suggested amendments to the Consumer Protection (E-commerce) Rules, 2020, including a ban on fraudulent flash sales by e-commerce companies. The Ministry of Consumer Affairs, Food and Public Distribution, a portfolio that Goyal holds, said that some e-commerce entities were limiting consumer choice by indulging in “back to back” or “flash sales”.
The ministry defined the term as sales organised “by an e-commerce entity at significantly reduced prices, high discounts or any other such promotions or attractive offers for a predetermined period of time on selective goods and services or otherwise with an intent to draw large number of consumers”. The ministry has also proposed prohibiting mis-selling, in which entities sell goods or services by misrepresenting information.