- Market Study on E-commerce in India
Relevance: Mains: G.S paper III: Economy
Why in news?
- The Competition Commission of India (CCI) released a Report titled ‘Market Study on E-commerce in India:
- The Market Study on E-commerce in India (‘the study’) was initiated by the CCI in April 2019 with a view to better understand the functioning of e-commerce in India and its implications for markets and competition.
- The objective was also to identify impediments to competition, if any, emerging from e-commerce and to ascertain the Commission’s enforcement and advocacy priorities in light of the same.
Key findings of the study:
- The study, a combination of secondary research, questionnaire survey, focused group discussions, one-on-one meetings, a multi-stakeholder workshop and written submissions of stakeholders, covered the three broad categories of e-commerce in consumer goods (mobiles, lifestyle, electrical and electronic appliances and grocery), accommodation services and food services.
- 16 online platforms, 164 business entities [including sellers (manufacturers and retailers) and service providers (hotels and restaurants)] and 7 payment system providers from across India participated in the study. In addition, 11 industry associations, representing different stakeholder groups, also participated.
- The study has helped gather useful insights and information on the key features of e-commerce in India, the different business models of e-commerce players, and the various aspects of commercial arrangements between market participants involved in e-commerce.
- The study has also provided an opportunity to learn from business enterprises on how they are responding to the advent of digital trade and has helped gauge the key parameters of competition in digital commerce.
- The study confirms that online commerce is gaining importance across the sectors studied. The share of online distribution and its relative importance vis-à-vis traditional channels varies significantly across products.
- This divergence constrains construction of a unified competition narrative and points to the need for product-specific assessment of market and competition dynamics. Online commerce, as the study shows, has increased price transparency and price competition.
- The search and compare functionalities of online platforms have lowered search cost for consumers and have provided them with a wide array of alternatives to choose from. For businesses, e-commerce has helped expand market participation by aiding innovative business models.
- The report released today presents the key trends identified and also discusses the issues that may, directly or indirectly, have a bearing on competition, or may hinder realisation of the full pro-competitive potential of e-commerce.
- These include the issues of lack of platform neutrality, unfair platform-to-business contract terms, exclusive contracts between online marketplace platforms and sellers/service providers, platform price parity restrictions and deep discounts.
- The CCI is of the view that many of these issues would lend themselves to a case-by-case examination by the CCI under the relevant provisions of the Competition Act, 2002. The report outlines these issues and presents the observations of the CCI on the same without assessing whether a conduct is anti-competitive or is justified in a particular context.
On the basis of the market study findings, the enforcement and advocacy priorities for the CCI in the e-commerce sector in India are, inter alia, the following: - Ensuring competition on the merits to harness efficiencies for consumers
- Increasing transparency to create incentive for competition and to reduce information asymmetry
- Fostering sustainable business relationships between all stakeholders
Search ranking
- Set out in the platforms’ terms and conditions a general description of the main search ranking parameters, drafted in plain and intelligible language and keep that description up to date.
- Where the main parameters include the possibility to influence ranking against any direct or indirect remuneration paid by business users, set out a description of those possibilities and of the effects of such remuneration on ranking.
- Introduction of the above-mentioned features, however, should not entail, disclosure of algorithms or any such information that may enable or facilitate manipulation of search results by third parties.
Collection, use and sharing of data
- Set out a clear and transparent policy on data that is collected on the platform, the use of such data by the platform and also the potential and actual sharing of such data with third parties or related entities.
User review and rating mechanism
- Adequate transparency over user review and rating mechanisms is necessary for ensuring information symmetry, which is a prerequisite for fair competition. Adequate transparency to be maintained in publishing and sharing user reviews and ratings with the business users. Reviews for only verified purchases to be published and mechanisms to be devised to prevent fraudulent reviews/ratings.
Revision in contract terms
- Notify the business users concerned of any proposed changes in terms and conditions. The proposed changes not to be implemented before the expiry of a notice period, which is reasonable and proportionate to the nature and extent of the envisaged changes and to their consequences for the business user concerned.
Discount policy
- Bring out clear and transparent policies on discounts, including inter alia the basis of discount rates funded by platforms for different products/suppliers and the implications of participation/non-participation in discount schemes.
- Video-based identification process
Relevance: Mains: G.S paper III: Economy
Why in news?
- The RBI amended the KYC norms allowing banks and other lending institutions regulated by it to use Video based Customer Identification Process (V-CIP), a move which will help them onboard customers remotely.
- The V-CIP, which will be consent-based, will make it easier for banks and other regulated entities to adhere to the RBI’s Know Your Customer (KYC) norms by leveraging the digital technology.
Key highlights:
- With a view to leveraging the digital channels for Customer Identification Process (CIP) by Regulated Entities (REs), the Reserve Bank has decided to permit V-CIP as a consent based alternate method of establishing the customer’s identity, for customer onboarding.
- The RBI further said that the regulated entities will have to ensure that the video recording is stored in a safe and secure manner and bears the date and time stamp.
- Also, “REs are encouraged to take assistance of the latest available technology”, including artificial intelligence (AI) and face matching technologies, to ensure the integrity of the process as well as the information furnished by the customer.
- The Reserve Bank said it decided to permit video based Customer Identification Process (V-CIP) as a consent based alternate method of establishing the customer’s identity, for customer onboarding with a view to leveraging the digital channels for Customer Identification Process (CIP) by REs.
- As per the circular, the reporting entity should capture a clear image of PAN card to be displayed by the customer during the process, except in cases where e-PAN is provided by the customer.
- The PAN details should be verified from the database of the issuing authority.
- Live location of the customer (Geotagging) shall be captured to ensure that customer is physically present in India.
- The official of the reporting entity should ensure that photograph of the customer in the Aadhaar/PAN details matches with the customer undertaking the V-CIP and the identification details in Aadhaar/PAN should match with the details provided by the customer.
Background:
- Last year, the government had notified amendment to the Prevention of Money-laundering (Maintenance of Records) Rules, 2005.
- Shifting trends in causes of riots
Relevance: Mains: G.S II: Polity
Why in news?
- As protests continue across the country over the Citizenship (Amendment) Act (CAA), latest crime data on violent protests suggest that until at least 2018 compared with 2017, public concerns were more about economic issues than about politics.
Key highlights:
- According to the 2018 crime report of the National Crime Records Bureau (NCRB), while riot cases due to communal, political, agrarian and student issues declined over 2017, riots arising out of industrial and water disputes rose sharply.
- According to the NCRB report, industrial riots rose from 178 in 2017 to 440 in 2018. Water dispute riots rose from 432 in 2017 to 838 in 2018.
- On the other hand, political riots fell by almost 25% in 2018 over 2017. Communal riots fell by almost 30% in the same period. Caste conflicts too declined by almost 20%. Student conflicts marginally fell by about 10%, while agrarian riots recorded a decline of over 35%.
- Offences under the Prevention of Damage to Public Property Act have seen a decline of over 10%. A total of 7,910 cases were registered under this Act in 2017. This declined to 7,127 in 2018. In 2018, UP topped the charts for offences under the Act. As many as 2,388 offences were registered by UP under the Act, followed by Tamil Nadu (2230) and Haryana (415).
- In 2018, 76,851 cases were registered under the category “Offences against Public Tranquillity”. This was a decline from 2017 which saw 78,051 such cases. Almost 90% of all such offences were associated with rioting while the rest were under “Unlawful Assembly” (Section 144).