Government sets competition guidelines for e-commerce companies
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According to a report by FE, the government will issue competition-related guidelines for e-commerce companies like Flipkart, Amazon, Swiggy, Zomato and others, capping market share, mergers and acquisitions, and cross-shareholdings.
The Government believes that intermediaries should be categorized according to their characteristics. For example, social media as an intermediary has different characteristics and impact on a consumer than e-commerce and digital media. So all of this should not be seen through one lens, but rather through multiple regulatory streams, the report said, citing sources involved in drafting regulations.
“Today there is a lot of ad hocism. Some injured parties turn to the Indian Competition Commission and the Antitrust Authority then decides whether or not the practices complained of are anti-competitive. All of this will change once the guidelines are put in place,” the report added, citing the sources.
The guidance will also examine aspects such as mergers and acquisitions between two e-commerce companies in the same field, the market share such a merged company can have and the nature of cross-holdings between two or more players.
“These are still early days and the matter is on the drawing board. A public consultation will be held to gather stakeholders’ comments before the government finalizes such guidelines,” the sources said, according to the report.
It also adds that regulating e-commerce intermediaries just because of misinformation is not enough, as they also need to be regulated for competitive reasons.
Currently, IT regulations reportedly only regulate social media platforms like Twitter, Facebook, Instagram, etc. It added that there are also regulatory guidelines for over-the-top players like Netflix, Amazon Prime Video, etc.