CCI warns e-commerce platforms of investigation into ‘unfair’ practices

The Competition Commission of India (CCI) on Saturday warned dominant e-commerce platforms of investigation into charges of opaque behaviour and unfair practices such as exclusive tie ups with certain sellers on items like mobile phones if they do not refrain from these methods.

CCI chairman Ashok Kumar Gupta said certain opaque practices of e-commerce platforms, for example, how products and services are ranked by these platforms in response to customer searches were highlighted in a report brought out by the regulator earlier in the week.

A major area of concern is exclusive sales tie ups, for example, sale of new models of certain mobile phones which are available only online. Gupta said if the concerns related to the adverse impact of these practices on market competition are not addressed by e-commerce players voluntarily, it will warrant an investigation.

“The Commission’s observations are not mere observations which can be ignored without consequence. But we have to give time to the industry to put their house in order. For each and every concern, we have given our observation (in the report). Those can get converted to a case. Enforcement can be done on a case to case basis. We are nudging them (e-commerce platforms). If tomorrow, this issue is agitated by some player before the Commission, then it becomes an altogether issue in terms of enforcement,” said Gupta.

He was speaking at a conference on competition law organised by the PHD Chamber of Commerce and Industry.

A trade body of conventional retailers has already filed a petition before the regulator relating to the impact online sale of mobile phones have on the market for such products. Gupta said online sale accounts for about 40-45% of mobile phones sold.

Mint had reported on 8 January that CCI has asked e-commerce platforms to be more open about how they rank products and services in response to customer searches and to ensure user reviews are genuine. The competition regulator also asked them to have transparent policies on what they do with the data collected on transactions.

Gupta said CCI can also initiate cases on its own against instances of unfair practice or abuse of dominance. “We can take up cases suo moto. Our intervention (in the market) should be minimal. No intervention if you can self- regulate,” said Gupta.

CCI nudged e-commerce platforms to address the concerns highlighted in its report on India’s e-commerce market.