Heavy discounting by Flipkart, Amazon likely to attract regulatory probe
Bengaluru/New Delhi: A regulatory probe may be conducted as popular e-commerce portals such as Flipkart, Amazon, Paytm and others who are offering heavy discounts as part of an Independence Day sale. A report on livemint.com indicated that the recent discounts by e-commerce platforms may trigger a regulatory probe of all online marketplaces.
The development comes just after Amazon and Flipkart geared up their carts for another round of freedom sale ahead of August 15. It may be noted that the issue has been under scrutiny since a long time and authorities such as the CCI have issued warnings against offering heavy discounts as it influences product prices either directly or indirectly, added the report. While India had earlier allowed 100 per cent FDI in online retail of goods and services, it clearly was against heavy discounting.Read more ↓
As of now, e-commerce portals such as Amazon, Flipkart, Snapdeal and Paytm Mall are offering discounts over 70 per cent on certain products on their platforms – from books to smartphones, the prices have been more than halved in order to attract customers. However, these online portals suggested that the discounts are offered directly by third-party sellers.
CCI, however, is not happy with the culture of deep discounts offered by such portals and have issued strong-worded warnings in the past. CCI’s reaction on the matter came after small store owners, led by the Confederation of All India Traders had protested against the deep discounting by Flipkart and also the alleged preferential treatment offered to favoured sellers.
Worth mentioning that Flipkart and Amazon have not only been warned over heavy discounting but also for violating the current FDI norms. While the freedom sale has kicked off with flying colours, it remains to be seen if offering deep discounts attract any legal penalty for Amazon and Flipkart among other companies.