'E-commerce firms shouldn't offer heavy discounts': Antitrust chief says ahead Amazon CEO Bezos' visit

WION Web Team New Delhi, Delhi, India Jan 14, 2020, 08.32 PM(IST)

A security guard stands outside the Competition Commission of India (CCI) headquarters. Photograph:( Reuters )

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'If you are absolutely clean, come out, put it (details) on your website. So that everybody knows and there is nothing opaque,' said Ashok Kumar Gupta, chairman of the Competition Commission of India (CCI).

India's anti-trust chief on Tuesday said that big e-commerce companies should offer massive discounts and urged them to disclose their discount policies on their websites to have a more transparent system.

"If you are absolutely clean, come out, put it (details) on your website. So that everybody knows and there is nothing opaque," news agency Reuters quoted Ashok Kumar Gupta, chairman of the Competition Commission of India (CCI) as saying.

"Otherwise there will be complaints, we will inquire - why do you want to subject yourself to this type of investigation if you are open about it," Gupta also said.

Gupta further said that there is no problem in giving discounts you are not among the main players of the market, but, once a firm acquires "market power, you cannot continue with these practices becaus eyou will start hurting incumbent players".

He then stressed on openness about discounting policies and said that how companies use customers' data is essential.

The latest comments come ahead of  Amazon CEO Jeff Bezos' visit to India which expected to face several protests by brick-and-mortar retailers.

According to a report, protests by the country's small business owners are planned against Bezos in 300 cities to step up their campaign against what they see as unfair business practices.

In particular, the shopkeepers accuse the two US giants of indulging in heavy discounts and giving preferential treatment to select sellers which is a violation of India's foreign investment rules. The companies deny any wrongdoing.

In Reuters' report, Gupta also said there was nothing wrong in giving discounts if you were an insignificant player, but "once you acquire market power, you cannot continue with these practices because you will start hurting the incumbent players."

Bezos will likely participate in an Amazon event in New Delhi, sources have said. He has also sought meetings with the prime minister and other government officials, according to one source.

Amazon has committed $5.5 billion in India investments, while Walmart in 2018 pumped in $16 billion to buy a majority stake in Flipkart, its biggest deal.

The CCI has said India is the world's fastest-growing e-commerce market, expected to grow at an annual rate of 51% between 2017 and 2020. It estimates the sector will generate revenues of $120 billion this year.

On Monday, an investigation against Amazon.com Inc and Walmart's Flipkart was ordered over alleged violations of competition law.

The Competition Commission of India (CCI) said it was ordering a wider probe following a review of allegations that Amazon and Flipkart were promoting some "preferred sellers" and in turn hurting business for other, smaller sellers.

(With inputs from Reuters)