India Proposes Tighter E-commerce Rules

Following complaints from small businesses of misuse of market dominance and deep discounting by the online retailers, India plans to tighten rules for e-commerce marketplaces, including Amazon and Flipkart.

The rules propose to limit so-called ‘flash sales’ of goods and services by e-commerce companies, according to amendments to the Consumer Protection (E-commerce) Rules, 2020 suggested by the consumer affairs ministry.

Conventional e-commerce flash sales are not banned. Only specific flash sales or back-to-back sales that limit consumer choice, increase prices and prevent a level playing field are not allowed.

“Certain e-commerce entities are engaging in limiting consumer choice by indulging in ‘back to back’ or ‘flash’ sales wherein one seller selling on platform does not carry any inventory or order fulfilment capability but merely places a ‘flash or back to back’ order with another seller controlled by platform. This prevents a level playing field and ultimately limits customer choice and increases prices,” the ministry said.