E-commerce platforms shouldn't let algorithms dictate consumer choices: Piyush Goyal

New Delhi: A day after criticising e-commerce companies for predatory pricing, Union Commerce Minister Piyush Goyal clarified on Thursday that he is not opposed to online platforms but wants them to operate "fairly and honestly" in India. 

Goyal emphasised that the rule of law must be upheld in both letter and spirit and that consumer choices should not be manipulated by algorithms. 

Reiterating his earlier concerns about safeguarding local businesses, Goyal underscored the need for small enterprises to have a fair opportunity to compete against e-commerce giants.

"We are very clear that we want to invite FDI (foreign direct investment), we want to invite technology, we want to have the best of the world, and we are not against online at all," Goyal said at an event here.

"What the country always desires is fair play, is honesty - for the customer, honesty to the supplier of goods and services and to ensure that other people also have a fair chance to compete against such online business," the Union minister, a member of Parliament from the Mumbai North constituency, said.

On Wednesday, Goyal expressed concerns over predatory pricing by e-commerce firms and the potential negative impact on small retailers in India. He publicly warned of the "huge social disruption" that could result from the rapid expansion of the e-commerce sector. 

Goyal also questioned Amazon's announcement of a USD 1 billion investment in India, suggesting that the US retailer was not significantly benefiting the Indian economy but rather compensating for its own losses in the country.

He said that their huge losses in India "smells of predatory pricing", which is not good for the country as it impacts crores of small retailers.

Goyal, a chartered accountant, lambasted the e-commerce companies on Wednesday, questioning their business model that has been impacting small retailers in the country.

"When Amazon says that we are going to invest a billion dollars in India and we all celebrate, and we forget the underlying story that the billion dollars are not coming in for great service or any great investment to support the Indian economy. They made a billion-dollar loss in their balance sheet that year, they had to fill in that loss.

"And how did that loss get caused, they paid Rs 1,000 crores to professionals. I do not know who these professionals are...I would love to know, which chartered accountants, professionals or lawyers get Rs 1,000 crores unless you are paying all the top lawyers to block them so that nobody can fight a case against you," the minister said.

On Thursday, he said the government wants to encourage online firms and is also in favour of such entities, which possess "tremendous benefits" like speed and convenience.

Later, speaking to reporters, he said the business should be based on the law of the land in letter and spirit.

"Algorithm should not be used to force consumer preferences. The ratings that are given on these sites should be honest," he said.

Without naming the entities, Goyal said the Consumer Affairs Ministry has "pulled up" some organizations for manipulating the ratings.

The government is desirous that the FDI policy on e-commerce which allows B2B in a marketplace model is followed "scrupulously by all foreign e-commerce companies" sticking to the law of the land, he said.

"We want to ensure that our consumers get choice, business practices are honest and within the law of the land," he added.

Meanwhile, Goyal also said that he is Hoping to come out with the new e-commerce policy soon.

He also said that every free trade agreement will be on the "strength of fair, equitable and balanced benefits for India."  The country will ensure that any FTA protects the interest of our farmers, animal husbandry, dairy, fishermen, MSMEs, and domestic manufacturing and will be crafted in a manner which is in the best interest of India and also gives equal opportunity to our counterparties, the Minister assured.

"We do not do agreements in a hurry and are finalized based on India's interests," Goyal said.