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US e-commerce giants need to drop arrogant ways and follow the law, says Piyush Goyal

Welcoming big players to participate in the Indian, the Commerce and Industry Minister cautioned them against flouting rules of the land (Pic: Courtesy PIB)

The Indian market is big and all players are welcome to participate but unfortunately large e-commerce companies blatantly flout the laws of the land, Commerce and Industry Minister Piyush Goyal said at a webinar on Saturday.

"I have had several engagements with these large companies, particularly the American ones, I can see a little bit of arrogance of their being big and their ability to finance large amounts of money in the initial stages to try and capture the Indian market or larger part of the Indian market particularly certain products to the detriment of our mom and pop stores," the minister pointed out.

The minister appeared to be referring to companies such as Amazon and Walmart but did not mention any names.

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All e-commerce companies should follow the law of the land and not use muscle or money power to hurt Indian interests. Many of these large online firms have come into India and "very" blatantly flouted the laws of the land, in more ways than one, Goyal said.

He said that many of the practices which these companies follow are against the interest of consumers and the government has recently come out with draft rules for e-commerce firms or marketplace models, which are applicable to all entities including Indian. These rules are to protect consumer interest, he explained.

Goyal said that it was "very unfair that just because they are large and have large pools of low cost capital, they should be allowed to get away with hurting domestic interests or domestic consumer interests.

Recalling one of his comments made on an announcement of an ecommerce giant investing USD 1 billion in India, Goyal said that the company was doing that funding because they had incurred losses in the previous two years by selling goods below cost to drive out competition and capture the market.

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In January 2020, the minister had stated that Jeff Bezos-led Amazon was not doing a favour to the country by investing and questioned how the online retailing major could incur such big losses if it was not resorting to predatory pricing.

They have to invest it because the company used that money to do predatory pricing, to probably subsidise some products and capture a larger share of the market to the detriment of small mom and pop stores, he said.

"If these companies have nothing to hide and if they are doing honest business practices, why do they not respond to CCI (Competition Commission of India)?" he questioned.

The fact that they are trying to evade probably justifies the view that they are probably indulging in predatory pricing, they are trying to influence market behaviour, their algorithms are trying to influence consumer choice and these are not permitted in India, he said.

He also said that several countries like the US are working on anti-trust laws for e-commerce and the UK's competition and market authority has opened investigations into big tech mainly US firms, "now clearly the world is waking up to the realities of these large tech and big ecommerce companies".

"We in India have about 60 million mom and pop stores spread across the country. When these large companies talk about providing a million jobs or giving support to maybe 100,000 Indian small manufacturers, "I think they very conveniently forget to also say what will be the job losses because of their influence," he said.