It’s not just Amazon and Flipkart ⁠— here’s why even the Tata Group is making Piyush Goyal angry

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It’s not just Amazon and Flipkart ⁠— here’s why even the Tata Group is making Piyush Goyal angry
BCCL
  • The debate is over the incoming rules on e-commerce.
  • Some of the most sticky issues in the rules include ‘fallback liability’ and the crackdown on flash sales and deep discounts.
  • Online retailers argue that the platform cannot be held responsible for deeds of the seller.
  • Check out the latest news and updates on Business Insider.
The tussle between e-commerce giants ⁠— both existing ones like Amazon as well as the ones like the over $120 billion Tata Group that is still building its online retail vertical ⁠— and India’s incoming regulations has burst out of closed doors.

"When I see Tata Sons that they're objecting to some consumer benefit laws or regulations that I'm bringing in, then frankly it hurts," India’s Commerce and Industry Minister Piyush Goyal reportedly said on August 12. The comments were made during the event hosted by the Confederation of Indian Industry (CII) and has since been reportedly removed.

Goyal was referring to pushback from the e-commerce players against the incoming norms, which the government says are intended to protect the consumers in e-commerce. The deadline for seeking comments on the rules ended on July 21.

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While the rules at the centre of this debate are called ‘Consumer Protection (E-Commerce) Rules, 2020,’ Goyal’s comments largely reflect the fear of traders’ community, the Confederation of All India Traders (CAIT) and Delhi Vyapar Mahasangh, lobbies that have been revolting against online retailers, particularly, foreign players like Amazon and Flipkart (now owned by US-based Walmart). “Six crore small shops, related to retail business and employing almost 12 crore people, are being threatened now,” he said.

These are some of the rules that are making online retailers like Amazon, Flipkart and the 150-year old Tata Group ⁠— which is trying to build its online retail empire with the acquisition of startups like BigBasket, 1mg and curefit ⁠— nervous.


Rule proposedE-commerce players’ argument
Flash sales are not allowedNeed more clarity
Fallback liabilityThe platform can’t be penalised for a seller’s act
Deep discountsTaking away discounts hurts consumers

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“Fallback liability” makes platforms like Amazon and Flipkart, or any other platform for that matter, liable to compensate the consumer if the seller registered with the entity fails to deliver the goods or services exactly in the way described on the platform.

“The concept of "Fall Back liability" should be done away with because it dilutes the intermediary safe harbour under the provisions of the IT Act as well as the arm’s length requirements provided under the FDI [foreign direct investment] Policy," industry body Internet and Mobile Association of India (IAMAI) had said earlier.

Online retailers are also under the scanner on various other issues
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Another issue that Amazon is facing is the antitrust probe for having exclusive tie-ups with makers of products like smartphones as well as for offering deep discounts.

The Supreme Court of India, last week, allowed the probe by the Competition Commission of India (CCI) to continue and told the companies to join the probe in four weeks. The Minister, Goyal, cheered this. “These companies even tried with their legal tricks to halt the investigation against them but it’s with extreme pleasure that I inform you that on the anniversary of ‘Quit India Movement’, the Supreme Court has quashed their plea. The apex court decided that CCI should investigate them and the fraudulent and unfair trade practices used by the companies as informed by the government and small shopkeepers to CCI.”

Other outfits rail against online giants
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The e-commerce rules have been creating a lot of furore in India. Other political outfits like the Swadeshi Jagran Manch (SJM) have argued that the rules are protecting only those who sell goods via online retail.

The SJM wants the laws to protect service providers ⁠— the likes of hairdressers, plumbers and electricians who are employed via platforms like Urban Company. SJM is affiliated to the Rashtriya Swayamsevak Sangh (RSS), which is the ideological parent for the Bharatiya Janata Party (BJP) that is in power at the government in New Delhi.


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