India will require e-commerce companies to treat sellers of their platforms equally and ensure transparency, according to a draft policy seen by Reuters on Saturday, which follows criticism of the business practices of major online companies. India has been discussing a new e-commerce policy for months amid complaints from retailers who claim that online giants such as Amazon and Walmart’s Flipkart flout federal regulations The companies have denied the allegations.
And Reuters special report last month revealed this Amazon has for years given preferential treatment to a small group of sellers on its platform in India and used them to circumvent foreign investment rules in the country.
The latest draft of the policy document says that operators must be impartial in their relations with sellers
“E-commerce operators must ensure equal treatment of all sellers / sellers registered on their platforms and not adopt algorithms that lead to the prioritization of selected suppliers / sellers,” it said. A spokesman for the trade ministry declined to comment. The policy will apply to Amazon and Flipkart – two of India’s top e-commerce players – as well as local players such as Reliance Industries, which plans to expand its JioMart online platform
All three companies did not immediately respond to a request for comment. Separately, India is considering changes to foreign investment rules that could force players, including Amazon, to restructure their ties to some major retailers, Reuters reported in January. Government officials are due to hold talks next week with industry leaders on such rules, according to people with direct knowledge. On Saturday, senior government officials from various departments, including the Ministry of Commerce, met to discuss e-commerce policy.
The timetable for publication and whether it will be subject to further changes were not immediately clear. Indian retailers have also complained about steep discounts offered by online companies that smaller retailers have failed to cope with.
Amazon and Flipcard they said they obeyed all the laws
E-commerce companies must “establish clear and transparent policies” regarding online discounts, the draft document said. A special Reuters report from last month – based on Amazon’s internal documents from 2012 to 2019 – shows that the company has helped a small number of sellers thrive on its platform in India by giving them reduced fees and helping to conclude of special deals with major technology manufacturers. Amazon said it “does not provide preferential treatment to any seller in its market” and that it “treats all sellers in a fair, transparent and non-discriminatory manner.”