E-commerce in India has been in news for both good and bad reasons. It is really good to know that Indian e-commerce players have started making their own mark in the e-commerce sphere. However, it is equally alarming that e-commerce websites of India are not following the e-commerce laws of India. As a result e-commerce frauds in India have significantly increased and there is an urgent need to regulate and punish such e-commerce offences and crimes in India.
In fact, Myntra, Flipkart and many more e-commerce websites are under regulatory scanner of Enforcement Directorate (ED) of India for violating Indian laws and policies. ED has also raided two Bitcoins websites and their offices. ED believes that Bitcoins money can be used for hawala transactions and funding terror operations and this seems to be a legally plausible explanation as well.
E-commerce websites and technology companies are also under the scanner of taxation and regulatory authorities around the world. For instance, some believe that Amazon, Google and Starbucks are playing with the U.K. tax laws. Similarly, foreign companies and e-commerce portals would be required to register in India and comply with Indian laws. Indian government has also proposed establishment of Income Tax Overseas Units (ITOUs) of India in foreign countries to deal with evasion of taxes.
Transfer pricing issues have become a bone of contention for multi national corporations (MNCs) operating in India. Vodafone, Nokia and Shell have already received notices from income tax authorities of India regarding transfer pricing and other taxation issues. There are also great chances that the compulsory transfer pricing audit based on monetary threshold may be scrapped in India. Indian Tax Department has already received 232 applications from MNCs in 2013-14 for Advance Pricing Agreement.
However, if we analyse the trends in this regard, companies like Google, Facebook, Samsung etc may face more scrutiny from EU, U.S. and Indian regulators in the future. For instance, Google faced an anti trust suit for abusing its search results that was finally settled by it with the Federal Trade Commission (FTC) of United States. However, the antitrust probe initiated by the European Union (EU) is still pending a resolution.
A case has also been filed before the Competition Commission of India (CCI) against Google in for discriminatory trade practices related to its AdWords program. It has been alleged by the complainant that Google has abused its dominance by engaging in discriminatory and retaliatory practices relating to AdWords. A similar complaint was also filed by the Consumer Unity and Trust Society (CUTS) against Google before the CCI. The CCI also imposed a fine of Rs. 1 Crore upon Google for failure to supply information/ documents in the investigations. When Google planned to launch its Flight Travel Search Service in India, Indian stakeholders threatened to file a case before the CCI. Google App Vault may also raise regulatory issues if introduced in India without complying with the techno legal requirements.
Small and medium businesses and entrepreneurs of India are also facing the problem of predatory pricing undertaken by big e-commerce websites operating in India. With great financial resources, the e-commerce companies and websites offer products and services that cannot be offered in normal course of business. As a result, the small businesses cannot sell their products in the market and they are forced to quit the market. This now leaves only the big fishes to explore and monopolise the Indian market.
We at Perry4Law believe that there is an urgent need on the part of Indian government to look into this unfair practice commonly adopted by e-commerce websites in India. These practices are resulting in e-commerce frauds, violation of Indian laws and disturbing the balance of trade, commerce and business in Indian market. These unproductive, unprofessional, illegal and unethical activities cannot be allowed to operate in India anymore.