The rules, which kick in on Friday, do not allow e-commerce sites to “exercise ownership or control over the inventory” of sellers.The All India Online Vendors Association, a group of about 3,500 online sellers, has accused both Flipkart and Amazon of using their dominant position to favour selected sellers.Flipkart and Amazon did not respond to requests for comment on their plans for complying with the new regulations.Both Amazon and Flipkart sought more time to comply with the new rules.“By the letter of the regulation it will not be considered to be an entity in which Amazon has an equity stake, but if the government is wanting to implement the spirit of this rule they might say this doesn’t cut it,” one of the sources said.E-commerce players may also be forced to give up the word “exclusive” when they launch products such as smartphones on their platforms, as the rules mandate that an online retailer cannot push vendors to “sell any product exclusively on its platform only”.Another rule blocks entities in which an e-commerce firm, or any of its group companies, owns a stake from selling its products on that firm’s marketplace.That could disrupt the models of Amazon and Flipkart, whose wholesale units buy products in bulk and sell to thousands of vendors on their platform, who in turn sell to consumers.
The new rules, meant to close loopholes in the regulations, state that if any seller purchases more than 25 per cent of its inventory from the wholesale units or other group companies of an e-commerce firm that runs an online marketplace, then that vendor’s inventory will be deemed to be controlled by the e-commerce company.
