EMERGING REGULATIONS AND COMPETITION SCENARIO IN INDIAN

E-COMMERCE MARKET AND ISSUES OF CONCERNS THEREIN

-Apeksha Tiwari

INTRODUCTION

The last decade has witnessed an upsurge in the worldwide e-commerce and
India is no exception to it. The increasing use of internet and smartphones/
tablets has risen the platform for e-commerce. Along with e-commerce
websites like Amazon, Myntra, Jabong etc, WhatsApp, Facebook, and
Instagram are also playing a vital role in shaping the Indian e-commerce
industry. Technology and internet ought to play an important role in the e-
commerce industry because the physical stores or the offline shopping
experience is not promising due to high maintenance cost and poor
infrastructure. Therefore, to regulate the escalation of the e-commerce
market in our country, provisions of Competition Law do play a dynamic
role.

EMERGING E-COMMERCE

E-commerce or electronic commerce can be defined as a system for buying

products or services with the internet as the main source of exchange. E-
Commerce can be characterized by the product basket and its global
outreach. Recently in September 2018, the renowned brand “GAP” was
introduced by Myntra and Jabong as the product has a huge demand in our
country with limited offline stores. Another major market for e-commerce is
travel including cab services, trains, air-tickets, bus tickets, and hotels.

INTERFACE BETWEEN E-COMMERCE AND COMPETITION LAW

India has adopted the modern competition law in the form of Competition
Act, 2002 (hereinafter referred as “Act”) and the competition regulator is
Competition Commission of India (hereinafter referred as “CCI”). With the
growing e-commerce in India, the issues related to the competition law have
also accelerated.

The Indian e-commerce has both domestic and international players.

Section 6 of the Act will be attracted once any merger or amalgamation
takes place whether in India or off-shore. Further, if any agreement is
entered between any producer-distributor, distributor-consumer without
considering section 3 of the act, the same may result in anti-competitive act
adversely affecting the market. There are certain telecom players like Airtel,
Vodafone, BSNL that maintained a monopoly over the market for decades
until Reliance Jio was introduced in 2017. The Act will come into the picture
to appreciate if the entry mechanism of the product was against the
permitted competitive practices or not.

· Ascertaining the Relevant Market: The most relevant

question which was decided by the CCI is that whether the online
markets and offline markets are different relevant markets. The CCI in
the Snapdeal Case (Anish Ahuja Vs. Snapdeal (Case no. 17 of
2014)) was of the view that the buyers weigh both the options keeping
the shopping experience and prices as the major factors and then
decide accordingly. Therefore, these are not different relevant markets
instead only different channels of distribution.

· Treatment of Exclusive Arrangements: We often see that

several products are exclusively available for purchase through e-
commerce only. One such example is the mobile phones
manufactured by OnePlus as these phones are exclusively available
on Amazon. It may be a manufacturer’s choice to adopt such policy so
that the product can reach a wider audience and becomes cost-
effective, but it still attracts anti-competitiveness as it may be trodden
by monopoly and dominance. Further, it was also alleged that the
physical market is affected by such an exclusive partnership. Whereas
the CCI is of the view that this is a new e-competition era, therefore,
exclusive arrangements are not anti-competitive.
 · Online Sales and Discounts: Undoubtedly, today’s world is of
big billion-day sales. The e-commerce players slash the prices of the
products during their sale days depending upon the occasion and the
actions of other players. The offline stores are now only reduced to
mere show-rooms where the consumer visits, inquiries about the
product but purchases it from the online store only. The offline
market players are unhappy with this practice as the maintenance
and infrastructure cost is much higher and the prices cannot be
slashed beyond a certain level as the break-even point for both online
and offline markets is highly variable. The CCI has been of variable
views regarding the same. In the case of Amazon, Flipkart wherein it
has been alleged that these e-commerce players are indulged in
predatory pricing but the CCI has prima-facie rejected this view.
Whereas, in the case of OlaCabs, CCI has pointed out that OlaCabs
was indulged in predatory pricing.

· Advertisement Schemes in E-Commerce Space: Competition

law provides the e-commerce companies to regulate their visibility
through advertisements and search engines. Google has been accused
of using its dominant position while advertising its own products at
the time of running its search engine. The instant issue is still
pending before the CCI.

CONCLUSION

The intervention of competition law is necessary to mold the functioning of

the e-commerce. The e-commerce today plays a significant role in today’s
market position, economy and employment. Competition law provides a
platform to the novel companies to enter the market and sustain
themselves. Further, the competition law is also helping the traditional
players to maintain their space in the market. Furthermore, Competition law
provides strategic protection to the e-commerce companies who are against
the dominance of huge internet players like Google. Therefore, the
importance of Competition law in e-commerce is pivotal at the current
moment and requires more clarifications and amendments to keep healthy
competition alive.