[Solved] With reference to foreign-owned e- commerce firms operating in India, which of the following statements is/are correct? They can sell their own goods in addition to offering their platforms as market- places. The degree to which they can own big sellers on their platforms is limited. Select the correct answer using the code given below:

Q6) With reference to foreign-owned e- commerce firms operating in India, which of the following statements is/are correct?

1. They can sell their own goods in addition to offering their platforms as market- places.
2. The degree to which they can own big sellers on their platforms is limited.

Select the correct answer using the code given below:

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

Answer: B

E-commerce Rules -2020

The Consumer Protection (E-Commerce) Rules, 2020, notified on July 23, regulate all commercial transactions involving goods or services sold over a digital or electronic network by retailers in India or overseas to consumers in India.

The e-com rules currently recognise two e-commerce business models, namely, the marketplace model and the inventory-based model.

While regulating e-commerce entities, the rules have separate specified provisions for the marketplace- and inventory-based entities, and for sellers who sell on the platform operated by a marketplace e-commerce entity.

The rules barred online marketplaces from holding inventory of their own or influencing the price of goods on their platforms.

They also prohibited group companies or entities in which marketplaces have control of inventory to sell on their platforms, among other things.

E-commerce companies must ensure none of their “related parties and associated enterprises” are listed as sellers on their shopping websites, and no related entity should sell goods to an online seller operating on the same platform. Hence, Statement 1 is not correct.

AS per e-commerce rules 2022, Every marketplace e-commerce entity shall— ensure that none of its related parties and associated enterprises are enlisted as sellers for sale to consumers directly.

The degree to which they can own big sellers on their platforms is zero (and not limited). Hence This statement is not correct. The Indian government has placed restrictions on e-commerce companies from selling products of companies in which they have an equity interest or control over the inventory.

Furthermore, no single seller or group of sellers is allowed to account for more than a certain percentage of the total sales on the platform (25%), ensuring fair competition among all vendors.

These rules are designed to prevent predatory practices, ensure fair competition, and protect the interests of domestic sellers on e-commerce platforms.

It’s important to note that regulations in this area are subject to change, so it’s advisable to consult the most current information or legal guidelines for the latest regulations. Hence statement 2 is not correct.