India's competition watchdog calls for more transparency on discounts by e-commerce platforms
In its report titled "Market Study on E-commerce in India", the anti-trust regulator has said that their study could not identify sources of cost savings that may fully explain the deep discounts
- Jan 9, 2020,
- Updated Jan 9, 2020 1:58 AM IST
The Competition Commission of India (CCI) has called for clear and transparent policies on discounts by e-commerce platforms, the basis of discount rates and the implications of participation/non-participation in such discount schemes.
In its report titled "Market Study on E-commerce in India", the anti-trust regulator has said that their study could not identify sources of cost savings that may fully explain the deep discounts. It says: "Discounts benefit consumers in the form of lower prices, and can help platforms create network. However, if the same is not a reflection of efficiency gains or cost savings and at the same time it creates distortionary effects on the supply side of the markets, the central question that arises is whether price competition of this form can be seen as competition on the merits."
It further says that the competitive assessment of discounts will have to be a fact-intensive exercise done on a case-by-case basis.
The report says that discounts could be considered distortionary if the e-commerce platforms are using them for forging exclusive contracts with the retailers and curbing the retailers from having tie-ups with multiple platforms.
Reliance announces entry into online grocery business with JioMart; to take on Amazon, Flipkart
The Competition Commission of India (CCI) has called for clear and transparent policies on discounts by e-commerce platforms, the basis of discount rates and the implications of participation/non-participation in such discount schemes.
In its report titled "Market Study on E-commerce in India", the anti-trust regulator has said that their study could not identify sources of cost savings that may fully explain the deep discounts. It says: "Discounts benefit consumers in the form of lower prices, and can help platforms create network. However, if the same is not a reflection of efficiency gains or cost savings and at the same time it creates distortionary effects on the supply side of the markets, the central question that arises is whether price competition of this form can be seen as competition on the merits."
It further says that the competitive assessment of discounts will have to be a fact-intensive exercise done on a case-by-case basis.
The report says that discounts could be considered distortionary if the e-commerce platforms are using them for forging exclusive contracts with the retailers and curbing the retailers from having tie-ups with multiple platforms.
Reliance announces entry into online grocery business with JioMart; to take on Amazon, Flipkart