NEW DELHI (Reuters) – Large e-commerce companies should not offer large discounts, they should disclose discount policies and ensure that they do not expel traditional rivals, India’s antitrust chief said when his commission launched an investigation into Amazon. com and Walmart Flipkart.
FILE PHOTO: People go from an Amazon India hoarding outside a subway station in New Delhi, India, on October 23, 2019. REUTERS / Anushree Fadnavis
The comments come before a visit by Amazon CEO Jeff Bezos to India this week, probably marked by a lot of tension with the country’s small business owners who plan protests in 300 cities as they intensify their campaign against what They consider unfair business practices.
In particular, merchants accuse the two US giants. UU. To allow great discounts and give preferential treatment to selected sellers.
The opening on discount policies and how companies use customer data is essential, said Ashok Kumar Gupta, president of the Indian Competition Commission (ITC).
“If it is absolutely clean, go out, put it (details) on your website. For everyone to know and nothing is opaque, ”he told Reuters in an interview.
“Otherwise, there will be complaints, we will ask: why do you want to undergo this type of investigation if you are open about it?”
He did not refer to companies by name. But only a few hours after its comments, the commission said Monday that it would investigate Amazon and Flipkart, pointing out the accusations of deep discount and promotion of “preferred sellers.”
Bezos will probably participate in an Amazon event in New Delhi, sources said. He has also sought meetings with the prime minister and other government officials, according to a source.
Amazon has committed $ 5.5 billion in investments in India, while Walmart in 2018 injected $ 16 billion to buy a majority stake in Flipkart, its largest deal.
Groups representing more than 70 million traditional retailers say that both firms violate the foreign investment rules of India, which aimed to avoid heavy discounts online. Companies deny the accusations.
Gupta said there was nothing wrong with giving discounts if you were an insignificant player, but “once you acquire market power, you cannot continue with these practices because you will start harming the starting players.”
The ICC has said that India is the fastest growing e-commerce market in the world, which is expected to grow at an annual rate of 51% between 2017 and 2020. It estimates that the sector will generate revenues of $ 120 billion this year. .
“This sector has given us many benefits … We want this sector to grow, no doubt,” said Gupta.
The JRC has asked its research arm to complete the probe within 60 days, but generally, such probes take much longer.
Aditya Kalra report; Edition of Sanjeev Miglani and Edwina Gibbs