With reference to foreign-owned e-commerce firms operating in India, which of the following statements is/are correct?

1. They can sell their own goods in addition to offering their platforms as marketplaces.
2. The degree to which they can own big sellers on their platforms is limited.

Select the correct answer using the code given below:

1. 1 only
2. 2 only
3. Both 1 and 2
4. Neither 1 nor 2

Explanation

Both statements are incorrect

As per the norms, Marketplace e-commerce entities are prohibited from: (i) listing affiliated enterprises as sellers on their platforms, and (ii) sharing information that could unfairly benefit these affiliated enterprises. Additionally, affiliated enterprises are not permitted to engage in activities that are prohibited for the marketplace e-commerce entity itself.

• E-commerce entity providing a marketplace will not exercise ownership or control over the inventory i.e. goods purported to be sold. Such ownership or control over the inventory will render the business into an inventory-based model. An inventory of a vendor will be deemed controlled by an e-commerce marketplace entity if more than 25% of the vendor’s purchases are from the marketplace entity or its group companies.

Answer: (d) Neither 1 nor 2; Difficulty Level: Hard