Amazon is targeted! India drafts e-commerce policy to protect sellers

For months, some Indian brick-and-mortar retailers have complained that online giants such as Amazon and Flipkart are ignoring federal regulations .

While Amazon and Flipkart have denied the allegations and said they comply with all laws , the Indian government has been considering a new e-commerce policy .

India will require e-commerce companies to treat sellers equally on their platforms and ensure transparency, Reuters reported recently, based on a draft e-commerce policy it had seen .

The latest draft of the policy document says operators should be fair when dealing with sellers. E-commerce operators must ensure equal treatment of all sellers/vendors registered on their platforms , and are prohibited from adopting algorithms that lead to preferential selection of specific sellers /vendors . E-commerce companies must "formulate clear and transparent online discount policies."

The policy will apply to Amazon and Flipkart, India’s two largest e-commerce companies, as well as Indian companies like Reliance Industries, which launched the JioMart online platform . None of the three companies immediately responded to requests for comment.

The draft e-commerce rules are aimed at preventing the creation of "digital monopolies" and helping local startups, which could raise costs and hamper expansion plans of companies such as Amazon.com Inc and Flipkart Inc and reduce their dominance in India's retail market to a certain extent .

A Reuters special report last month, based on internal Amazon documents between 2012 and 2019, showed that Amazon helped a handful of sellers thrive on its Indian platform by offering them discounted prices and helping them secure special deals with big tech makers.

Amazon says it " does not give any preference to any seller on its marketplace " and claims it " treats all sellers in a fair, transparent and non-discriminatory manner at all times . "

But a Reuters special report last month revealed that Amazon had for years given preferential treatment to a small group of sellers on its Indian platform and used them to circumvent the country's foreign investment rules.

Reuters reported in January that India is also considering changing its foreign investment rules, which could prompt players including Amazon to readjust their relationships with some major sellers.

Indian government officials will hold talks with industry executives next week on such regulations, according to people familiar with the matter. Senior government officials from several Indian departments , including the Ministry of Commerce, met on Saturday to discuss e-commerce policy. But it is unclear how long the publication will take and whether there will be further revisions.

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