200 Ecommerce Companies Under Scrutiny For Fakes

ecommerce companies fake Image Source: oneindia.com

The Ministry of Consumer Affairs has received complaints against about 200 e-commerce companies which are either non-existent or selling fake products or flouting FDI norms. The Ministry has taken the matter to Department of Industrial Promotion and Policy (DIPP), submitting the list of the companies. The names of the companies have not yet been disclosed.

Many companies seem to be non-existent. They have used fake phone numbers and email ids. Out of 200, 46 haven’t responded to emails sent by Consumer Affairs Ministry. Also, grievances of offline retailers and their associations against e-commerce companies will be addressed.

They have complained about the aggressive discount strategies adopted by the e-commerce companies, thus flouting FDI guidelines. FDI guideline says, “An e-commerce entity offering the marketplace will not ‘directly or indirectly’ influence the sale price of goods or services”.

Two officials will be assigned to run a grievance redressal mechanism to address e-commerce related queries. The complaints will be addressed within two days via twitter. The decision was taken after a meeting held between the officials of Ministry of Commerce, DIPP and Niti Aayog.

“The department will coordinate with state governments and the ministry to get to the bottom of the issue,” said Commerce and Industry Minister, Nirmala Sitharaman in a statement to the media.

The state governments would examine whether e-commerce firms were registered in their jurisdiction and if they were operating as fake companies. DIPP would look into whether the e-commerce firms were operating under the ‘marketplace model’ or ‘inventory-based model.

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