Draft e-com policy proposes curbing deep discounts on online platforms

The government is planning to curb the practice of deep discounting on e-commerce platforms like Amazon and Flipkart. The draft e-commerce policy proposes to stop such a pricing policy from a specified date to regulate the sector. The policy has proposed legislation that will cover food delivery sites such as Swiggy and Zomato, online service aggregators like UrbanClap as well as platforms offering financial and payment products such as Paytm and Policybazaar.

The plan includes multiple aspects, from consumer protection and grievance redressal to ownership, FDI, local storage of data, protecting micro, small and medium enterprises and mergers and acquisitions, in the legislation. The draft has also suggested appointment of a regulator for the sector. Further, discount curbs should not be limited to marketplaces such as Amazon and Flipkart. Deep discounts should include checks on differential pricing, which will restrict brands from offering two sets of prices for the same product sold offline and online.

Meanwhile industry have raised concerns about clauses related to data localisation, contradictions in Press Note 3, deep discounts, preference to RuPay and digital products in the draft e-commerce policy. Amazon and Walmart are opposed to the draft ecommerce policy as they feel the policy is heavily tilted against foreign firms while domestic companies including Reliance Industries have said the proposal to allow 49 per cent FDI in online marketplaces that hold inventory and sell directly to consumers contradicts the government’s stated intent to strengthen Press Note 3, which bars any foreign direct investment (FDI) in inventory-based online retail.