The Centre, along with State governments, will soon initiate a probe into the operations of e-commerce companies. The move comes in the wake of complaints from consumers alleging that many of these firms are either selling inferior quality goods/services or flouting Foreign Direct Investment (FDI) norms.
Commerce and Industry Minister Nirmala Sitharaman told reporters on Thursday that the States would examine whether e-commerce firms were registered in their jurisdiction and if they were operating as fake companies.
Meanwhile, the Consumer Affairs Ministry will take up complaints from consumers on poor quality goods and services of e-commerce firms, while the Department of Industrial Policy and Promotion (DIPP), will check whether the e-commerce players are violating FDI norms. The huge discounts on the e-platforms of these e-commerce firms amount to influencing the sale prices of goods or services, thereby flouting the FDI policy, according to a recent complaint filed before the DIPP by the Confederation of All India Traders (CAIT).
Ms.Sitharaman also said that the DIPP would look into whether the e-commerce firms were operating under the ‘marketplace model’ or ‘inventory-based model’.
Following the setting up of an online grievance redressal mechanism by the Commerce and Industry and Consumer Affairs ministries, the government received complaints against about 200 e-commerce firms.
Ms. Sitharaman said despite repeated efforts by the Consumer Affairs Ministry to reach these companies through phone and e-mail to resolve the issues, many of them did not respond.
