New e-commerce rules
Ecommerce giants raise concern with Centre over new laws meant to safeguard small retailers
New Delhi/IBNS: Representatives of e-tailers, including Amazon and Tata, approached the government on Saturday over new e-commerce laws announced in June that were perceived to be detrimental to their business models, according to a media report.
The executives raised concerns with the department of consumer affairs about the tough e-commerce rules and asked for the extension of the July 6 deadline for the submission of comments on the new rules, according to NDTV.
Restrictions on flash sales, definition of related parties and compliance of norms for e-commerce majors were among some of the aspects of the new rules which have left the ecommerce giants worried, their representatives conveyed to the government officials, the report informed.
The online retailers have been asked to submit written feedback on the rules, the executives told NDTV.
New e-commerce rules announced on June 21, aimed at strengthening protection for consumers and small retailers, are viewed as tough by the country's online sellers, especially market leaders Amazon and Flipkart.
The new rules limiting flash sales, barring misleading advertisements and mandating a complaints system, among other proposals could force ecommerce giants to restructure their business models and increase costs for Indian rivals including Reliance Industries' JioMart, BigBasket and Snapdeal, reported NDTV.
Amazon argued that COVID-19 had already hit small businesses and the proposed rules will have a huge impact on its sellers, arguing that some clauses were already covered by existing law, news agency Reuters reported citing sources who asked not to be named as the discussions were private.
The proposed policy states e-commerce firms must ensure none of their related enterprises are listed as sellers on their websites, which could be problematic for Amazon as it has an indirect stake in at least two of its sellers, Cloudtail and Appario.
Tata Sons argued that it was problematic, citing an example to say it would stop Starbucks - which has a joint-venture with Tata in India - from offering its products on Tata's marketplace website, Reuters reported.
The Tata executive said the rules will have wide ramifications for the conglomerate and could restrict sales of its private brands, sources told Reuters.
A consumer ministry official argued that the rules meant to protect the small retailers were not as tough as those in the other countries, according to the report.
A Reliance executive told Reuters that the proposed rules would boost consumer confidence, but added that some clauses needed clarification.
Small businesses and retailers have complained that Amazon and Flipkart manage to bypass foreign investment law using complex business structures.
Reuters reported in February about Amazon documents that showed it gave preferential treatment to a small number of its sellers and bypassed foreign investment rules. Amazon said it did not give preferential treatment to anybody.
The government will issue certain clarifications shortly on the foreign investment rules, commerce minister Piyush Goyal told reporters on Friday, said the NDTV report.
Goyal accused large online retailers of "arrogance" and of flouting laws by indulging in predatory pricing practices, the report further informed.
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