CCI to be the Referee!
On Wed (Brief #33), we told you about the ugly food fight b/w restaurant owners & food-delivery apps.
Turns out that it’s not the only sector where the fishes are lining up to rebel against tech-sharks that are chomping away their margins and treating them unfairly.
Hotels vs. OTA’s
FHRAI, that is the world’s 3rd largest association of hotels is leading the war against Online Travel agencies (MMT, GoIbibo etc) by accusing them of charging ‘exorbitant’ commissions(close to 40%), encouraging a system that advocates unfair/false reviews and allowing private properties (that do not have commercial approvals) to operate on their platforms.
Retailers vs. E-com portals
This is the oldest, largest & ugliest battleground.
While the govt tried to implement stricter standards (in 2016 & 2018), the tech-giants have always found a way around. They continue holding & selling inventory (more than 25%) on their own platforms (discreetly) and since they know the customer a lot more than the retailers that use their platform (thank data analysis), they rule the game.
Their web of companies stay ‘one hand away’ (& one step ahead) to avoid legal disputes but they continue behaving as monopolies. Private labeling and preferential treatment thrives while small-medium scale retailers (that can’t cut their thin margins) suffer.
Will the ‘real’ Competition Commission of India please stand up?
In a conference held earlier this week (after the #LogOut campaign), the CCI has assured players that it will re-formulate a policy to eliminate monopolistic practices from the markets.
Still, we can’t help but wonder – If we remove those heavy price cuts from the equation, how else will startups compete against one-another?
Their games are built around market share, not profitability and under the constant pressure of living up to the expectations of their investors, they have to survive. It’s confusing.
CCI, you’re up!