Amazon needs to level the playing field and ensure fair competition

Amazon needs India more than India probably does the company. Image courtesy David/Wikimedia Commons

The recent Diwali festivities have brought much joy to countless micro, small, and medium-sized businesses that sell their products online through various e-commerce platforms.

However, this happy development, coming as it does amid reports of green shoots becoming visible in some sectors of the economy, should not make us take our eyes off one of the most significant issues in India’s growing online retail arena.

That is the need to ensure that Amazon does not queer the pitch for fair competition in India’s promising e-retail segment by using its giant size, technology prowess, and access to innumerable key data points to potentially sound the death knell of several small retailers, and, also, significantly, restrict the buying choices available to customers.

For all its proclamations about doing well by doing good for stakeholders, Amazon — whose business practices have already come under question elsewhere in the world — has never publicly clarified how it is providing a level-playing field to all the local businesses that use its platform. Amazon has also been less than vocal, at least in India, on the mechanisms it has put in place to ensure that its online marketplace does not disproportionately benefit some sellers more than others.

Amazon — against whom the European Commission, on 10 November, announced its intention to start a second formal investigation — for instance, has, till date, not made it known in public forums whether it has provided any assurances to Indian online sellers that the data which they provide to the e-commerce behemoth would not be used by the Seattle-based company to compete against them.

Besides, Amazon has not spelt out what measures it has introduced or intends to do so, going forward, to prevent the emergence of a scenario where Indian micro, small, and medium enterprises (MSMEs) find themselves vying with the US company itself for the same customers.

Further, for a company that claims to lay great emphasis on fostering the growth of sellers using its platform so that they may thrive, and, in turn, benefit customers, Amazon has never really been all that open about the operations of its suspension policies as they relate to sellers in India. Including, importantly, on whether such policies are adequately explained to all the MSMEs in a language that they understand at the time of onboarding them to the platform. Amazon’s suspension policies and the implementation of such, it may be noted, have already come under the scanner in some parts of the globe.

For reasons unclear, an impression has been allowed to gain ground that authorities digging too deep into whether Amazon is going about its business the right way in India may potentially send wrong signals to prospective foreign investors, and likely make them think twice about investing here. Such apprehension is unfounded. No big MNC, for example, would stop investing money in Europe just because the European Commission has decided to investigate Amazon.

Amazon is here in India because of the sheer size of the market and the potential it holds for growth makes this country an attractive proposition for the company. The investments that Amazon has already made and promised to do so in future needs to be seen in this context. Amazon needs India more than India probably does the company. In January, Union Minister Piyush Goyal rightly commented that Amazon was not doing India a ‘big favour’ by investing in the country.

There is not the faintest likelihood of Amazon turning its back on this nation of 1.4 billion people if its activities are probed deeper by the authorities to ensure that the company’s online marketplace is benefiting all sellers equally, and, also, at the same time offering customers adequate buying choices.

At the end of the day, no sector can ever realise its true potential if the interests of a key stakeholder are not adequately taken care of. It would be unfortunate if India’s organised retail arena fails to achieve the levels it is capable of due to our seeming reluctance to look closely into whether some e-commerce platforms are only being selectively beneficial.

The author is a current affairs commentator and tweets @sumalimoitra. Views are personal.