 "Hold your fire, Mr Biyani: CCI doesn't think Flipkart, Amazon's sales are predatory pricing")
This bit of news may come as a relief to e-commerce companies and as a shocker to their offline rivals, especially Future Group CEO Kishore Biyani.
According to a report in The Times of India, the Competition Commission of India has indicated that the ecommerce companies’ sales and offers may not fall under the purview of predatory pricing norms.
“As of now, we are not looking into the matter of e-tailers offering discounts through online sale,” CCI chairman Ashok Chawla has been quoted as saying in the report.
When asked whether the competition watchdog would take up the matter suo motu, he said that it was not necessary at the present stage.
After Flipkart’s Big Billion Day sale earlier this week, offline retailers have been on a rampage alleging that e-retailers were indulging in predatory pricing by offering ultra-deep discounts on products.
Biyani was in the forefront of the attack on online retailers. “Laws in this country do not allow sales below cost price. This is anti-competitive. We (at Big Bazaar and other retail brands) never sell below cost price,” he had told Firstbiz.
However, CCI’s latest comments may help put a lid on the raging controversy, at least to a small extent.
CCI has also told the newspaper there it has not yet received any complaints from the offline retailers yet on the issue and it can look into the issue only if it receives the complaint.
Legal experts had earlier told The Hindu BusinessLine that there is no basis for offline retailers’ predatory pricing allegation.
Gautam Shahi of J Sagar, a legal firm, told the newspaper pointing to an earlier case before CCI between Ashish Ahuja and Snapdeal that the CCI had ordered that “Snapdeal is not engaged in purchase and sale of products, and operates only as a web portal for other dealers”.
According to today’s ToI report it would be ‘predatory pricing’ only if the online retailers were a dominant player. But since they form only 1-2 percent of the overall retail market, their sales cannot be termed predatory, the report said quoting a CCI official.
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