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India seeks ban on e-commerce sites discounting own-brand goods

Crackdown on global giants comes as UN criticises content takedown rules

India’s government has revealed new rules it is proposing to curtail the market power of big e-commerce players.

The Consumer Protection (E-Commerce) Rules, 2020 [PDF] propose that India’s Department for Promotion of Industry and Internal Trade will create a registration scheme that awards operators an ID number that proves their legitimacy to consumers.

The rules also suggest a ban on “flash” sales that see an e-commerce platform lend a hand to a related entity. A government announcement of the new rules describes the type of sales as follows:

Certain e-commerce entities are engaging in limiting consumer choice by indulging in ‘back-to-back’ or ‘flash’ sales wherein one seller selling on platform does not carry any inventory or order fulfilment capability but merely places a ‘flash’ or ‘back-to-back’ order with another seller controlled by platform. This prevents a level playing field and ultimately limits customer choice and increases prices.

The Rules have been proposed as India grapples with the market power of big e-commerce players, especially and Flipkart, as both have stakes in local e-commerce operators, vendors of various products, and logistics players.

The rules also propose that e-commerce operators be required to ensure that shoppers can filter out imported goods or are shown alternative domestic products, and outline redress measures for customers who feel the products they ordered were misrepresented or inadequate.

Another proposed requirement is for e-commerce operators to appoint in-country grievance and compliance officers.

That requirement is mirrored in India’s new Digital Media Ethics Code, which is currently the centre of a stoush between India and Twitter over whether the micro-blogging service has flouted the rules by failing to appoint local staff.

Twitter and WhatsApp have also pushed back against the Code’s requirement to identify users, and now they have an unlikely ally in the form of the United Nations.

The global body has revealed a letter [PDF] it despatched to the Indian government that suggests some provisions of the Code contravene international law pertaining to privacy and freedom of speech.

The Indian government’s response states that the nation has robust free speech rights, and that the Code’s requirement to identify the “originator” of content posted to social media does not erode privacy but will make it easier to remove content depicting sexual abuse or violence.

India has also had a win with a global governance body: to celebrate Monday’s International Day of Yoga, the World Health Organisation has published an app called “myoga” that will be translated into many languages. Indian prime minister Narendra Modi praised the app as enabling more people around the world to enjoy yoga and its benefits. ®

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