India: CCI’s Market Study On E-Commerce

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The Competition Commission of India (CCI) on January 08, 2020
released its Report on “Market Study on E-commerce
in India”. The Study was commenced by CCI in
April, 209 with a view to better understand the functioning of
e-commerce in India and its implications on markets and
competition. CCI’s objective behind the Study is to engage with
industry and ascertain the Commission’s enforcement and
advocacy priorities in relation to e-commerce, with greater clarity
on market developments and emerging impediments to competition.

CCI’s Report can be accessed here.

The three areas which have been focused in the Study

Key market trends and main features
of ecommerce

Key competition issues that have
emerged from the study.

The observations of the Commission
based on the findings

Growing Trends of E-Commerce

The Study in Chapter 2 reports India as the fastest growing
market for the e-commerce sector. According to quoted figures, the
revenue from the e-commerce sector is expected to increase from USD
39 billion in 2017 to USD 120 billion in 2020, growing at an annual
rate of 51 percent, the highest in the world. Most of this growth
is credited to the increasing funding received from across the
world since 2009 and also to the higher engagement with the
consumer base on account of increase in internet and smartphone
penetration in India.

Some of the categories which the Report recognizes instrumental
in growth in the E-commerce sector are food, online travel bookings
and food tech industry.

Importance of E-Commerce

The study confirms that the growth of e-commerce has been at an
increasingly high rate and with a comfortable and adapting
environment would continue to increase this rate. The scope of
E-commerce athe digital economy although is extremely varied among
the three different sectors. While the retail sector treats
e-commerce as a primary means of sales only for a few products with
others relying on physical retail, online travel agencies (OTA) and
food services have considered the importance of platforms to be
very high and feel the need for expanding their online

Strategic Response to E-Commerce Growth

The big players in all of these sectors have been gearing up to
tackle the challenges of the digitization of economy head on while
attempting to capitalize on the various avenues of new
opportunities. Retailers believe it is essential to expand upon
their online presence in order to engage with their consumer base.
Retailers have started either launching their standalone web stores
or have increased reliance on marketplace platforms. OTAs and food
services have both been revamped with the introduction of cloud
kitchen services and OTAs lending their brand name to smaller
chains as a sign of quality assurance.

Role of Online Marketplace Platforms

According to the study third party marketplace platforms have
been responsible for 64% of digital retail trade in India. The
shift in retail from offline to online is a rapid escalation which
with the adapting of networking and technology will not slow

Anti-Trust Issues Identified in the Study

Chapter 3 of the Report identifies competition related issues in
the E-commerce sector.


The competition issue recognized herein is that e-commerce
sites, when they serve as both a marketplace and a competitor on
that marketplace, have the incentive to leverage their control over
the platform in favour of their preferred vendors or private label
products to the disadvantage of other sellers/. The Report states
that the access that platforms have to both consumers and price
data have enabled a strategic stronghold on the retail market with
various platforms entering the market with their private

Platform to Business

The report states that the imposition of arbitrary terms in
contracts by big platforms creates a situation where the business
of a retailer is at the mercy of the big platform players and their
unilateral revision of terms as was observed by the CCI in
FHRAI v MakeMyTrip & Go-Ibibo, wherein the Commission
acknowledged the dominant position of the OTAs and initiated
investigation into the abuse of dominance.

Price Parity

Price parity clauses, which require that retailers don’t
offer better prices on other marketplace platforms and/or on their
own website, were identified as potentially distortive. This
reduces inter-platform competition and encourages oligopolistic
coordination between platforms to control the competitiveness of
the market.


Exclusive agreements are along the lines of platform-bundling
where a product will only be launched on specific platform or where
a platform would only list products of a certain brand in a

Deep Discounts

In a market where consumers have a tendency to flock towards
discounts, the extremely discriminatory discount policies of
platforms has been identified as an anti-competitive factor by the
CCI. Forcing prices to be lower than costs have led to erosion of
profitability while non-participation in discount policies has led
to demotion in search rankings which is discriminatory in

The Report while recognizing the competition related issues in
the e-commerce market also suggests measures for ensuring free
market and avoid market distortion which inter alia
includes increased transparency in parameters of search, increase
transparency for discounting, data regulation.

Related Posts

Laws Governing E-commerce in India

Draft E-commerce Guidelines for Consumer Protection Issued by the
Department of Consumer Affairs

For further information please contact at S.S Rana &
Co. email: or
call at ( 91- 11 4012 3000). Our website can be accessed at

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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