India To Require eCommerce Marketplaces To Treat Sellers Equally

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India To Require eCommerce Marketplaces To Treat Sellers Equally
India To Require eCommerce Marketplaces To Treat Sellers Equally

India is drafting a new policy that would require eCommerce marketplaces to treat all sellers on their platforms equally.

The Indian government’s move to consider the mandate follows continued criticism by brick and mortar retailers against online platforms such as Amazon and Walmart’s Flipkart, who continue to sidestep regulatory requirements and undercut prices to dry out competition from local businesses.

Amazon, for example, has given preferential treatments to select sellers on its Indian website so as to circumvent India’s foreign investment rules, a Reuters investigation found. The eCommerce platform has also made similar moves in markets such as the U.S., where it has been known to rank sponsoring sellers higher in user search than others.

This is prompting the Indian government to consider changing its foreign investment rules, which would require eCommerce marketplaces like Amazon to restructure their ties with major sellers on its platform.

“E-commerce operators must ensure equal treatment of all sellers/vendors registered on their platforms and not adopt algorithms which result in prioritizing select vendors/sellers,” the policy draft says. The policy will also require eCommerce platforms to be transparent with their pricing structures.

The policy will also impact domestic players such as Flipkart and Reliance Industry’s JioMart, which have quickly expanded their foothold in the country’s eCommerce space.

While Amazon has yet to comment on the policy draft, the company has previously refuted claims that it gives preferential treatment to certain sellers on its platform. However, according to a Reuters investigation, the company reportedly helped a small number of sellers on its platforms by giving them discounted fees and even helping one of them cut special deals with a big tech manufacturer.

Top government officials from various departments met on Saturday to discuss the policy draft, but it remains unclear when the country’s commerce ministry will implement it.

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