Following the changes to Flipkart’s commission rates in May, many sellers on the ecommerce platform have been unable to adjust their prices for over a month.
Controversy Surrounding Flipkart’s Commission Rates and Seller Allegations
These commission rates have been imposed by the Walmart.
Sellers, who spoke under the condition of anonymity, alleged that the changes contravene India’s foreign direct investment (FDI) policy for e-commerce and favour larger sellers over smaller ones, raising concerns of anti-competitive practices.
With no response received from the Commerce Ministry on queries, it seems that the senior government officials are unaware of this situation.
A trade union leader and Member of Parliament, Praveen Khandelwal emphasized that e-commerce platforms like Flipkart cannot dictate prices, underscoring their role as facilitators rather than price influencers.
Sources privy to the developments suggested that the restriction on the price changes by Flipkart may be a strategy to ensure lower commissions benefit consumers directly. The new rate card simplifies commission structures to enhance transparency but has left sellers feeling unfairly treated as they were not given sufficient time to adapt.
Stating that this policy aims to support seller growth transparently, Flipkart in its response asserted compliance with FDI regulations and denies influencing pricing. They highlight ongoing efforts to educate sellers on policy changes and enhance operational efficiency.
The screenshots from eight sellers were reviewed which confirmed their inability to adjust the prices despite multiple support requests.
Fairness and Equity Concerns in Flipkart’s Seller Pricing Policies
Sellers cite system prompts like “System Update: Keep revisions closer to historic settlement value,” hindering price increases that would lead to higher pay-outs based on historical settlement averages.
Unlike larger counterparts who reportedly receive preferential treatment, the concerns have been raised by the smaller sellers who do not have dedicated key account managers.
This disparity potentially violates anti-trust regulations by favouring larger sellers and restricting market fairness, according to legal experts.
Widespread discontent has been triggered by Flipkart’s pricing policy which has led to prompting accusations of market manipulation and potential regulatory scrutiny into discriminatory practices between seller sizes.
This throws light on the ongoing challenges in balancing e-commerce regulation with market competition and fair business practices.
