Traders body calls for introduction of regulator for e-commerce sector

The national trader body, the Confederation of All Indian Traders (CAIT), has called for the creation of a “dedicated regulator” for the e-commerce sector to protect the interests of small businesses and traders.

According to the merchant body, different e-commerce entities are currently regulated by different entities, resulting in a piecemeal approach and creating confusion among different stakeholders.

Given the rapid growth of this sector and its unique sector challenges, CAIT suggested the establishment of a regulator as part of the e-commerce policy being finalized by the government.

“Due to the technicality of e-commerce platforms, and the network of several actors with different concerns, it is desirable to have such a regulator to implement the inclusive e-commerce policy, which would have ex ante regulations applicable in e-commerce. commerce segment, to the benefit of the entire ecosystem,” CAIT General Secretary Praveen Khandelwal said when releasing a white paper on e-commerce on Tuesday.

He said the regulator should order markets not to provide any rebates because it has the effect of being “discriminatory” and “distorting”.

Currently, the e-commerce space is governed by the Foreign Direct Investment Policy, the Competition Act 2002, the Consumer Protection Act 2019 and the Electronic Commerce Rules 2019, the information technology.

The white paper contains a set of 27 recommendations for the government to incorporate into proposed e-commerce policy and nine recommendations for planned changes under e-commerce consumer protection rules.

The government must address concerns stemming from lack of platform neutrality, excessive discounts and unfair use of data. “E-commerce policy should pay particular attention to the aforementioned concerns while setting the way forward for the industry,” the white paper says. He also said the e-commerce policy should direct marketplaces not to provide any discounts as it has the effect of being “discriminatory” and “distortive”.

The publication of the white paper comes as the government is finalizing the e-commerce policy. The Department of Industry is organizing interdepartmental consultations for the national e-commerce policy which will clarify the responsibilities of marketplaces, sellers and ensure that consumers are able to make an informed decision before buying a product. The Department of Consumer Affairs had proposed another set of guidelines for retailers in June last year. Although the ministry has completed stakeholder consultation, the rules have yet to be finalized.

Interestingly, both sets of rules have yet to be rolled out by the respective ministries. Any change in policy or the introduction of a new rule or policy has been criticized for increasing the compliance burden for e-commerce businesses or being too harsh. Indeed, about a year ago, the DPIIT had internally proposed the creation of an e-commerce sector regulator, which was rejected by most ministries during an interministerial consultation.

According to CAIT, e-commerce is currently dominated by a few large platforms and a few large sellers, usually affiliated with the platforms. This often puts small sellers at a disadvantage as it reduces their visibility in the market. Although the size of the e-commerce market has grown, smaller sellers have not seen the benefits at the same rate. Therefore, it is important to formulate a policy for e-commerce with a focus on all stakeholders, he said.

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