E-Commerce Industry And Competition Law
By Team Legistify / 2016-05-13
Last decade has witnessed the upsurge in the e-commerce activities across the globe. India is no exception, and hence the result is mushrooming internet platforms, a sporadic growth of start-ups and changing consumer preferences. Although the e-commerce industry in India is in its nascent stage, it is already under the Competition Commission’s scanner. It is evident that e-commerce will provoke a different set of anti-competitive concerns which may be unknown or unexpected. A number of issues emerge like; Will the existing gamut of rules and regulations would be applicable under these new economic circumstances as well?

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India’s e-commerce market was worth about USD 3.8 billion in 2009, it went up to USD 17 billion in 2014 and to USD 23 billion in 2015 and is expected to touch whopping USD 38 billion marks by 2016. US investment bank Goldman Sachs last year in October, pegged the online retail or e-tail segment to be valued at $69 billion. The investment bank has stated that the e-commerce market as a whole was expected to breach the $100-billion mark by 2020. It had said the overall online market in the country including travel, payments and retail could reach $103 billion, of which the e-tail segment would be valued at $69 billion.

The increasing use of smartphones, tablets and internet broadband and 3G has led to developing a strong consumer base likely to increase further. RedSeer Consulting founder and CEO Anil Kumar said the Indian E-tailing players might have faced a lot of challenges in 2016, but fundamentally this sector is expected to grow 4X-5X times in the next 4 years. "2017 will be a hotly-contested year, and will differentiate the best from the rest, and also shape the Indian e-Commerce industry for the many years to follow," he added.

The report stated that development in the nature of government regulations on discounting and marketplace, demonetisation, slow new customer acquisition and funding drying up were some of the "speed breakers" of the year 2016 for the industry.

Technology and Internet will play a key role in Indian retail market going forward, especially considering that retail space is expensive and the customer offline shopping experience is not world class due to lagging infrastructure and poor selection, the report said.  Therefore such large-scale mushrooming in the e-commerce sector is bound to attract provisions of Competition Law.

In India, the Competition Commission of India ('CCI') is the authority which has established under the Competition Act, 2002 (Act) to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade carried on by other participants, in markets in India. It covers within its ambit all categories of 'markets' in India including the pharmaceuticals sector as well. Moreover, the Act is extra-territorial and assumes jurisdiction over acts even outside India that may affect a market within India. This article aims to detail the competition law aspects which have come up before the Competition Commission of India.

ASCERTAINMENT OF RELEVANT MARKET

Last decade has witnessed the upsurge in the e-commerce activities across the globe. India is no exception, and hence the result is mushrooming internet platforms, a sporadic growth of start-ups and changing consumer preferences. Although the e-commerce industry in India is in its nascent stage, it is already under the Competition Commission’s scanner. It is evident that e-commerce will provoke a different set of anti-competitive concerns which may be unknown or unexpected. A number of issues emerge like; Will the existing gamut of rules and regulations would be applicable under these new economic circumstances as well?

Have a Legal Issue?

Get connected to the Best Lawyers and Chartered Accountants Near You!


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