In what could have significant ramifications for Amazon, Flipkart and other ecommerce companies, the chairman of the Competition Commission of India Ashok Kumar Gupta told CNBC-TV18 that the watchdog will not shy away from taking suo motu action on deep discounting and discriminatory pricing if warranted.

Asking e-commerce players to increase transparency, the head of the CCI said, "If other entities and business participants feel that they may need competition law enforcement, then cases can be filed. And, suo moto also CCI can take up such cases and go ahead with enforcement."

Recently, the CCI has released a study titled "Market Study on e-Commerce in India: Key findings & observations." This was done after the Confederation of All India Traders (CAIT) approached the CCI and complained about "unethical commercial practices" of ecommerce platforms like Amazon and Flipkart. Also, CAIT claimed that the two ecommerce players are in violation of the FDI policy by indulging in predatory pricing.

Edited excerpt:

Can you explain to us the purpose of this study on ecommerce?

The purpose of the market study was to understand the sector and find out concerns which are being raised by various stakeholders. We have identified those concerns. We are finding that there are information asymmetry and imbalance in bargaining power. If you see the last chapter that the CCI is telling these platforms to bridge this information asymmetry, they have to be transparent in their working particularly on search ranking, use of consumer data, rating of entities and in case, they sit with business entities, share this data, then probably a number of concerns may get addressed. What your discount policy is, what are your various factors and then in any case these concerns (expressed by stakeholders in CCI e-commerce report) can lead to enforcement on the basis of case by case analysis.

But since this sector is a newly emerging sector and we are finding that this sector has benefited a lot in terms of price competition, price transparency, we want this sector to grow. But, at the same time, we also need this sector should be in harmony with other counterparts and business practices which they evolve should also be in sync with brick and mortar shop. Once they do this, probably some part of the concerns may get addressed.

But if those concerns remain, and if other entities and business participants feel that still, they may need competition law enforcement then, cases can be filed. And, suo motu also CCI can take up such cases and go ahead with enforcement.

Are you pitching for a dialogue?

It’s not that I am saying first you do this and then you do that, it can run parallel also. They can keep setting their house in order and probably be more transparent. Other entities, they are free under competition law to file those cases and the CCI will any case can examine those. I am not saying that some time has been given. We have raised some concerns and it's a new emerging sector. Competition concerns are coming, business behaviours are changing so it is better than those concerns are known to the ecommerce platforms. In case they feel that something can be done, then it is better and anybody is free to come to the commission and seek redressal.

Will CII take suo motu cognizance of the issues?

CCI takes suo motu cognizance of competition issues depending upon observation. We are free to do that. We have done this (suo moto cognizance) in a number of cases.

What about this case?

That depends on the sector or particular case that comes before us either through newspaper or filing or in any other manner or through complaints. So there are various ways, we get info and then, we internally debate if that case if good enough for the investigation.

Is self-regulation good enough? You have suggested that.

We are telling them these are the concerns that have been expressed and please be more transparent in your working. Please remove this information asymmetry and in case you are able to do that, probably, those concerns will get reduced. In any case, competition law is there, anyone is free to come to competition commission for any of those concerns or we can suo moto pick up any issue for enforcement.

First Published:Jan 11, 2020 3:21 PM IST