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CCI releases market study on e-com in India

13
Jan '20

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Ensuring competition on the merits to harness efficiencies for consumers, increasing transparency to create incentive for competition and to reduce information asymmetry and fostering sustainable business relationships between all stakeholders are the enforcement and advocacy priorities in the e-commerce sector for India’s Competition Commission of India (CCI).

CCI arrived at this conclusion after conducting a market study on e-commerce, which started in April 2019 and whose report was released recently. The objective was also to identify impediments to competition, if any, emerging from e-commerce and to ascertain CCI’s enforcement and advocacy priorities in light of the same, according to an official release.

The insights gained from the study will inform anti-trust enforcement in these markets. Bargaining power imbalance and information asymmetry between e-commerce marketplace platforms and their business users are at the core of many issues that have come up in the study.

Without a formal determination of violation of competition law, improving transparency over certain areas of the platforms’ functioning can reduce information asymmetry and can have a positive influence on competition outcomes, the study found.

The report enumerates certain areas for self-regulation by e-commerce marketplace platforms to reduce information asymmetry and promote merit-based competition.

CCI has urged e-commerce platforms to put in place transparency measures like search ranking; collection, use and sharing of data; an user review and rating mechanism; revision in contract terms and a transparent policy on discounts.

Fibre2Fashion News Desk (DS)

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