CAIT writes to Suresh Prabhu, says listing of e-commerce cos on stock exchanges will control predatory pricing

Last Updated: Tue, Aug 28, 2018 12:22 hrs

New Delhi: The Confederation of All India Traders, a traders body has written to Suresh Prabhu, the minister for Commerce and Industry.

The letter has demanded that fundamentals of the e-commerce policy draft should not be dilute and that restrictions on discounts and freebies offered by e-commerce companies must persist.

With a view to control indiscriminate and predatory pricing strategy adopted by e-commerce players, CAIT has mooted a new plan.

They have suggested e-commerce companies to be listed with stock exchanges "as it will stop their ability to keep on making sustained losses by adopting indiscriminate discounting which is hurting small traders".

Praveen Khandelwal, CAIT's Secretary General claimed that discounts funded and financed by e-commerce platforms are the biggest weapons used to gain market share.

"This is nothing but classic predatory pricing and as such the policy must contain restrictions on offering discounts and freebie," he said.

Khandelwal also alleged that such platforms are blatantly violating the conditions imposed by Press Note 3 under FEMA and RBI, ED and other enforcement agencies are looking other way probably under some sort of influence which was evident from the fact that in past years many complaints have been made directly and also forwarded by Commerce Ministry but so far no investigation was conducted and the issue was being dealt in a casual manner.

"Though the present Competition Law has suitable provisions for dealing with Predatory Pricing, however, it appears that Commission is not acting in its right spirit and no opportunity of hearing has been given to objections filed by us and orders have been passed by the Commission giving green signal to Walmart-Flipkart deal," he said.

CAIT has suggested that holding inventory clauses in the policy proposal should be withdrawn, claiming that the policy has provision for inventory holding in certain cases which is nothing but back-door entry of FDI in Retail.

Khandelwal said that there is a dire need of a regulator to monitor e-commerce platforms

"We suggest that the said Regulator may be armed with powers to take penal action against the platforms which violate the policy, Rules or Regulations," CAIT said.

It is also suggested that an effective Grievance Forum should also be constituted to hear the grievances of the consumers and a Help Line should also be started for easy access to consumers in case of any grievances against any e-commerce platform.

Suresh Prabhu and the Commerce ministry's reply is yet awaited.