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Foreign e-commerce companies violated Indian laws, Piyush Goyal says

New Delhi: Large e-commerce firms have come into India and are “very blatantly” violating Indian laws, in more ways than one, Union Commerce and Industry Minister Piyush Goyal said on Sunday.

The minister charged them of arrogance and using capital to the detriment of small shopkeepers in India.

“I read several engagements with these large companies, particularly American ones, and I can see a little bit of an arrogance of their being big and their ability to finance large amounts of money in the initial stages to try and capture the Indian market or larger part of the Indian market, particularly certain products, to the detriment of mom and pop stores,” Goyal said at an event by the Stanford India Policy and Economics Club. “And I think it’s very unfair that just because they are large, they have large pools of capital…, they should be allowed to get away with hurting domestic interests.”

“I remember a comment I made, which became quite a matter of debate. A large e-commerce player had spoken about investing $1 billion in India, and made a song and dance about it. But the song and dance has been made about investing a billion dollars, but then it got to a loss of nearly a billion dollars in the previous two years,” he said. “So all they were doing was funding the losses there and this is what prompted me to say they’re not doing us a favour, or they’re not, it’s not a great generosity to India that they’re investing a billion dollars in India.”

He added that they have to invest it because they’ve used that money to do predatory pricing to probably subsidise some products that capture a larger share of the market.

“As I said to the detriment of the smaller retailers and smaller shops, and when questioned about it. They keep fobbing off, they keep delaying, giving you information. And when people complain to the Competition Commission of India, they immediately started hopping in the Law Courts of India. So trying to go to one court, you lose in that court, go to another court,” Goyal said.

“To my mind, is there nothing to hide. If they’re doing honest business practices. Why don’t they respond to the Competition Commission of India. The fact that they’re trying to evade that probably only justifies that they are probably indulging in predatory pricing. They are trying to influence market behaviour, their algorithms are trying to influence consumer choice. And these are not permitted in India,” he said.

The Commerce Minister said that the US is working on antitrust laws for e-commerce and several other countries—including the UK, Luxembourg and other European countries—are also working on similar lines.

“Australia has already passed along news media and digital platforms mandatory bargaining. Now clearly, the world is waking up to the reality of these large tech and big e-commerce companies,” Goyal said.

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