Role of E-marketplace Regulation and Related Statutory Authorities in eCommerce Ecosystem

It is unimaginable to think of the concept of eMarketplaces without a planned digital revolution, consumers who trust the platform, and sellers or entrepreneurs who explore their ambitions online. With the outbreak of the COVID-19 pandemic, the presence of large digital platforms has bridged the gap between online sellers and consumers to strengthen the business aspect of both sides. Therefore, eMarketplace acts as the heart of any online business activity.

eMarketplace in India has always been disputed as the few players have ceased the power and have been running the entire eCommerce as per their directions. Allegations including anti-competitive practices like deep discounts, opacity concerning search rankings, routine leveling of data review and usage, self-preferencing of private labels are the major cause of concern for players. In response, the regulatory response to issues between platforms and their businesses users has far been unclear and divided. With the growth of eCommerce activities, the regulators have realized the need to do more to assure consumer protection and maintain the sanity of the eMarketplace.

In research done by Vidhi India, it is found that the regulatory framework to protect online consumers from the clutches of privately-owned digital gateways without a transparent democratic and legitimate mechanism can prove to be a short-sighted idea. It is a vague way to look for solutions without identifying and mitigating long-term risks and economic suffering from a consumer point of view.

Therefore, it is highly imperative to develop an ecosystem to nurture the concept of a sustainable eMarketplace. Vidhi India further adds that they have detailed the proposed P2B competition regulation in seven international jurisdictions to highlight the global regulatory response. Based upon their research, they have identified avenues for calibrated solutions in the Indian context to balance the fairness of the eMarketplace to float innovative growth in it.

Regulatory Governing E-marketplaces in India

The country has several statutory instruments, but the P2B competition issue examination is yet to be addressed in the country’s eMarketplace. For instance, the Consumer Protection (eCommerce) Rules, 2020 and the Draft National eCommerce Policy, 2019 are more focused on consumer welfare rather than talking less on P2B competition regulation that deals with Foreign Direct Investment (FDI) and The Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021 have limited liability and accountability.

The Competition Act, 2002 (‘the Competition Act’) provides some powers to the Competition Commission of India to intervene and act upon anti-competitive conduct that may not suffice in the normal code of conduct.