Is retail-kiryana sector bracing for good days? Centre’s draft Digital Competition Bill aims to reign in e-commerce companies

29 August 2024

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Srinagar, Aug 29: Is there light at the end of the tunnel for the country’s retail sector, including the Kiryana stores? Possibly yes.

After years of stiff competition and significant loss of business to e-commerce, the union government’s draft Digital Competition Bill is aiming to regulating the digital economy, particularly focusing on large online platforms and their impact on retail sector and overall competition.

The proposed Bill, as per the details accessed by Ziraat Times, seeks to address concerns related to anti-competitive practices by major digital companies, especially in the context of e-commerce and quick commerce, which have been disrupting traditional retail markets, including local small kirana stores.

Following are the key objectives of the draft Digital Competition Bill:

1. Regulating Big Tech Companies: The Bill aims to create a framework to regulate the practices of large digital companies, often referred to as “gatekeepers.” These are companies that hold a dominant position in the digital marketplace and can influence the competitive dynamics to their advantage.

2. Promoting Fair Competition: The Bill intends to ensure that the digital economy remains competitive and that smaller players, including traditional retail stores like kirana stores, have a fair chance to compete. It seeks to prevent big tech companies from engaging in practices that could stifle competition, such as predatory pricing, exclusive tie-ups, or unfair access to data.

3. Preventing Market Concentration:

The Bill may also include provisions to prevent excessive market concentration by imposing restrictions on mergers and acquisitions that could further consolidate the power of large digital platforms, Ziraat Times learnt.

4. Transparency and Accountability:

The Bill proposes mechanisms to ensure greater transparency in the operations of digital platforms. This could involve mandating clearer terms of service, fairer algorithms for ranking products and services, and more transparency in how data is collected and used.

5. Protection of Small Retailers:

The Bill is likely to include specific provisions aimed at protecting small retailers, including kirana stores, from the overwhelming competition posed by large e-commerce platforms. This could involve measures like:

– Restrictions on Deep Discounting: Limiting the ability of large e-commerce platforms to offer deep discounts that small retailers cannot match.
– Support for Local Businesses:

Encouraging e-commerce platforms to support local businesses by providing them with better visibility on their platforms or by offering incentives for customers to shop locally.

– Equal Access to Data: Ensuring that small retailers have access to the same consumer data that large platforms use to drive sales, helping them to compete more effectively.

6. Digital Fair Trade Practices:

The Bill may establish guidelines for fair trade practices in the digital economy, including how products are listed, how sellers are treated, and ensuring that large platforms do not exploit their position to disadvantage smaller competitors.

Would this translate into better business for Kirana Stores?

The primary aim of these provisions is to create a more level playing field where local kirana stores and other small retailers can compete fairly with large online and quick commerce platforms. By curbing practices that currently give large platforms an unfair advantage, the Bill seeks to protect the livelihood of small retailers who are a vital part of India’s retail ecosystem.

When Will the Proposed Legislation Bacome a Law?

As of now, the Digital Competition Bill is still in the draft stage and subject to consultations and modifications. The final version of the Bill will be shaped by input from various stakeholders, including industry experts, consumer groups, and representatives of small businesses, including kirana store owners. The goal is to craft a balanced approach that would promote innovation in the digital economy while protecting the interests of traditional retail businesses.