In response to retailer complaints, DPIIT requests CCI to look into rapid commerce solutions

In response to local retailers' complaints regarding anti-competitive activities, the Department for Promotion of Industry and Internal Trade (DPIIT) has asked the Competition Commission of India (CCI) to look into fast commerce platforms, such as Blinkit and Zepto. This action follows the cautionary remarks made by Commerce Minister Piyush Goyal about the dangers of predatory pricing—a practice in which businesses cut prices to gain market share before eventually raising them—and the societal disruption that e-commerce platforms can bring.

Local retailers allege that quick delivery services are engaging in unfair practices, a concern that the DPIIT has brought to the CCI's attention. The DPIIT argues that while discounts may benefit consumers, they can harm smaller businesses that cannot compete on price, potentially leading to higher prices once competition diminishes.

Although the CCI does not directly regulate prices, it is tasked with ensuring fair competition within the market.

It has been revealed that the DPIIT's letter to the CCI chairman outlines complaints against quick commerce companies for employing anti-competitive marketing strategies. The letter highlights allegations that these firms are signing exclusive agreements with certain suppliers, giving specific vendors an unfair advantage and enabling them to dominate the market.

India’s e-commerce sector is projected to grow to $325 billion by 2030, fueled by the nation’s 881 million internet users. Currently valued at $70 billion, e-commerce constitutes approximately 7 percent of India’s retail market, as per a report.

Additionally, the CCI’s Director General of Investigation has reported that Amazon Seller Services Pvt. Ltd. and Flipkart Internet Pvt. Ltd. have allegedly breached competition laws by favoring certain sellers, launching exclusive products, and offering significant discounts. Both companies are currently involved in proceedings with the CCI.