ONDC –
The Open Network for Digital Commerce (ONDC) is a network based on an open protocol that allows any network-enabled application, such as those for mobility, retail, food delivery, hotel reservations, and travel, to be recognised and engaged in local commerce across segments. The platform aims to dismantle digital monopolies, provide new avenues for growth, and enable independent merchants and small- to medium-sized enterprises to participate in online marketplaces. It is a project of the Department for Promotion of Industry and Internal Trade (DPIIT) of the Ministry of Commerce and Industry.
To facilitate the delivery of goods from the seller to the buyer, the early stages of the ONDC plan to provide services for retail and wholesale transactions as well as some logistical solutions. These may include deals between retailers or wholesalers and logistics service providers. It is expected that using logistics solutions will deepen supply chains in addition to other advantages. The ONDC is also expected to be introduced to the hospitality and tourism sectors. It is projected that the ONDC’s implementation will incorporate several e-commerce platform functional elements, such as
- Product classification,
- pricing discovery,
- vendor discovery,
- inventory control.
The ONDC may be incorporated as a “not-for-profit private company” in accordance with Section 8 of the 2013 Companies Act. With operations in more than 85 Indian cities (including tier-two towns), the ONDC is now in its alpha and beta test phases. Eventually, it will span the entire state and serve as a single point of access for all products and services. Public news sources provide the idea that a consumer transaction fee would be levied in the future to ensure the ONDC’s sustainability, even if there might not be one during the ONDC’s initial phases.
Competitive Practices in the Digital Space –
Anti-competitive actions in the digital arena pose serious challenges to the preservation of fair competition and consumer protection in India’s rapidly emerging digital economy. These actions are being taken by market players to suppress competition, limit consumer choices, and impede innovation in the digital market. The types of anti-competitive practices that exist in India’s digital market are as follows:
- Exclusive Agreement: It is common to observe on e-commerce platforms that specific products from a given business entity are made available on specific websites. Certain e-commerce platforms might only accept products from a specific manufacturer inside a specific product category. These are all feasible because there is full understanding between two or more entities. Exclusive agreements typically restrict users’ ability to buy the same interests on other websites by prohibiting them from buying goods from other platforms, regardless of price or availability. The consumer is the victim of this kind of behaviour.
- Predatory Pricing: The low cost of the things is one of the main reasons influencing online purchasing. But the industry has been severely rocked by these trends. Predatory pricing, which puts companies at the top of the food chain, has shown how easy it is to suppress competition by giving low-cost goods and services, increasing their market dominance, and then taking advantage of the same market by raising prices for the same goods and services. One of the most well-known instances of predatory pricing is Jio’s 2016 telecom market takeover, which involved offering its consumers free 4G services.
- Self-Preferring: It is well known that companies such as Amazon and Flipkart give preference to their products and certain suppliers over other vendors. More openness seems to be needed in the way they list their products; big businesses seem to be buying up the top spots, which harms small producers and retailers by reducing their ability to reach customers. Regardless of how good their offering is, we receive the targeted customers.
ONDC promoting Competitive Practices –
- Collaboration and Standardisation:
A collection of protocols and standards from ONDC make it possible for various e-commerce platforms to work together. By guaranteeing that their services are available to a bigger consumer base without requiring them to make significant investments in their own infrastructure, this enables smaller businesses to compete with larger ones. - Lowering of Entry Barriers:
For newcomers, ONDC lowers the upfront costs and complexity by offering a common infrastructure. With little financial outlay, smaller companies and regional merchants can connect with the network to access a nationwide or even international customer base. - Portability of Data:
The ONDC places a strong emphasis on data portability, making sure that vendors may keep their customer data and transfer it between various network platforms. By doing this, reliance on any one platform is lessened, and competition based on service quality and cost rather than data monopolisation is encouraged. - Diverse Involvement:
A broad spectrum of participants is intended for the open network, comprising craftsmen, small and medium-sized enterprises (SMEs), and rural entrepreneurs. Due to the increase in the quantity and range of options available to customers, this diversity promotes competitiveness. - Originality and Excellence:
With more competitors in the market, companies are motivated to distinguish out by innovating and raising the calibre of their products. This creates a dynamic market where success and survival depend on constant innovation focused on the needs of the client and improvement.
Examples of Regulatory Actions –
- EU’s Actions Against Google: European Commission fined Google for Anti-Competitive Practices such as Bias Search and Pre-installation of Google Apps in Android Devices.
- US Antitrust Cases: US has observed High-Profile Antitrust Cases against Microsoft, Facebook, Apple addressing Issue from Monopolistic practices to Unfair Competition.
- India’s CCI Investigation: The Competition Commission of India investigated Digital companies like Amazon and Flipkart for alleged Anti- Competitive Practices.
BY – APARNA SINGH KSHATRIYA