Regulation could help ONDC counter an e-com duopoly

Source– The post is based on the article “Regulation could help ONDC counter an e-com duopoly” published in the mint on 8th November 2022.

Syllabus: GS3- Economy

Relevance– E-commerce

News- The article explains the concept of Open Network for Digital Commerce proposed by the government to counter the platform power of e-commerce majors.

What is ONDC?

It will decentralise e-commerce. It will allow buyers and sellers to transact via multiple apps without being locked into a specific platform.

Interoperability will foster competition, lower e-commerce entry barriers and reduce the ability of larger platforms to charge exorbitant commissions from sellers.

It will institute an “issue and grievance management” structure . It will also institute the reputation profile of all network participants.

What are the issues with ONDC?

Big platforms have technological capability. They provide consistent management of customer satisfaction and dispute resolution. ONDC needs to ensure it.

ONDC runs into conceptual problems from an operational and privacy perspective. Different entities in a transaction means disaggregated responsibility.

The issue of reputation is problematic. All customers, sellers and logistics providers must be visible through all buyer and seller sides apps. It requires badging of all network participants. This badging will have to be centralised and publicly available. It has privacy implications.

What is the way forward?

There is a need for regulations to manage conflict of interest, mandating interoperability and data portability.

Privacy issues can be solved by limiting the badging to sellers. But it will raise overhead costs.