|Introduction: Contextual introduction.|
Body: Explain how dominant position of online aggregator platforms is damaging small and medium businesses and customers. Also write some international experiences for dealing with this issue.
Conclusion: Write a way forward.
The proliferation of a wide range of e-commerce platforms has created convenience and increased consumer choice. But in reality, the initial cashback and deep discounts have turned out to be a forerunner to addiction. Be it e-marketplaces like Amazon and Flipkart or food service aggregators like Zomato or Swiggy or travel aggregators like Makemytrip and OYO, all have been accused of distorting the market.
The following points explain that the dominant position of online aggregator platforms is damaging small and medium businesses and customers:
- These companies resort to predatory pricing to acquire customers even as they suffer persistent financial losses. This is an exclusionary practice that eliminates other players from the market and consumers will have a reduced bargaining position due to less competition.
- While using these platforms, citizens share their data. The aggregators gather shopping habits, consumer preferences, and other personal data. The platforms are accused of using this data for taking away business from other sellers on their platform.
- There is a lack of fair and transparent dispute resolution mechanism for sellers on these platforms. Delayed payments, unreasonable charges, and hidden fees are common occurrences.
- Unreasonable and one-sided contracts allow travel aggregators to have a disparity clause which allows them to offer rooms at a much cheaper rate but bars the hotels from doing so.
- Restaurants are many a time forced to accept orders at prices much lower than their agreement.
- A set of comprehensive rules and regulations is needed. These regulations need to be inclusive, should eliminate the conflicts of interest inherent in current market practices, and prevent any anti-competitive practices.
- A model agreement that is fair and allows a level playing field between the aggregators and their business partners should be implemented.
- There is a lot to learn from the Digital Markets Act of the EU that seeks to address unfair practices by these gatekeepers.
- Strong and quick grievance redressal and dispute resolution mechanisms should be established. The rules should allow for punitive penalties for unfair practices.
- Market dominance and subsequent invoking of fair competition rules should be triggered at the level of micro-markets and for product segments.
The nature of our success in dealing with this change will lie in the ways in which we deal with the concerns of all players.