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India responded to Amazon merchants' problems: US official

19
Feb '19
India responded to Amazon merchants
India, with the new e-commerce rules, has responded to a problem faced routinely by merchants selling on Amazon, according to a top US official. "Amazon will spot their best-selling products and then produce an Amazon-branded version, demoting them in search listings and eating their sales," Lina Khan, legal fellow at the US Federal Trade Commission, said.

The new Indian norms on foreign direct investment (FDI), which came into effect on February 1, prohibit e-tailers from selling products of companies in which they have stakes, despite both Amazon and Walmart seeking a six-month delay in their implementation.

Amazon has been forced to remove an array of products from its India website in order to comply with the new regulations.

In a paper titled 'The separation of platforms and commerce', Khan pointed out that a key feature of such e-commerce majors is their structure, in which being integrated across lines of business, they compete with the companies that now depend on them.

This structure enables dominant platforms "to discriminate against and extort value from rival businesses, threatening to undermine innovation and the competitive process", she wrote, adding that structural separation to prevent such anti-competitive practices has been a key principle in US competition policy history.

Khan cited the example of the US Congress passing a law in 1906 prohibiting railroads from transporting goods they owned and applying a similar rule to TV networks, telecom operators, as well as banks.

The United States has a rich history of ‘structural separations’, she said this policy was guided by the consideration of ‘whether the intermediary was a bottleneck’, according to a news agency report.

Earlier this month, Khan had tweeted: "India has introduced a new rule prohibiting e-commerce platforms from selling their own goods on the platform. The idea is you can either run the marketplace, or sell your goods on the marketplace, but not both." (DS)

Fibre2Fashion News Desk – India


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