Opora Rossii is stepping up the fight for non-discriminatory access of suppliers to online platforms. The organization prepared and sent to the Federal Antimonopoly Service (FAS) a draft concept that obliges Internet companies to disclose ranking algorithms, to give equal access conditions and the ability for suppliers to manage prices on all platforms. Participants in the e-commerce market are confident that premature government regulation will only harm it.
Opora Rossii sent to the FAS the concept of rules for non-discriminatory access to online platforms that provide intermediary services. “Kommersant” has a copy of the document. Among the requirements – disclosure of information on the ranking of sellers and goods, identification of suppliers, prohibition of unjustified denial of access, prohibition of price parity, etc. Control is proposed to be given to the FAS. For online platforms with a dominant position, there is a “turnover penalty” for violations, for the rest – a fixed one.
Aleksey Kozhevnikov, the vice-president of Opora Rossii, explained to Kommersant that the organization had prepared a concept, having received recommendations based on the results of an expert council at the FAS at the end of May, after it asked the service to initiate the preparation of market regulation measures.
The reason was the conflict between Russian hoteliers and Booking.com: the service was accused of imposing unfavorable conditions – price parity, which allowed Booking.com to guarantee the best offer. At the end of 2020, the FAS issued Booking.com BV an order to eliminate violations, demanding that the terms on price parity be excluded from contracts. Booking.com BV is currently challenging the decision in court. A representative from Booking.com BV did not provide a prompt comment.
The Opora Rossii concept assumes that the supplier of goods or services will be able to vary prices on the platforms himself. Platform operators will disclose the procedure for the provision and cost of services, the ranking criterion, and the formation of contextual advertising. The terms of the concluded contracts should be uniform for counterparties supplying comparable goods and services. Users must be notified of changes in the rules at least 20 days in advance. The FAS told Kommersant that the proposals will be submitted to the expert council for the development of competition in IT.
An example of the abuse of online platforms is described in the appeal of the public council under the Federal Antimonopoly Service of the Ivanovo Region to Opor Rossii (Kommersant also has a copy). As stated in the letter, in the summer of 2020, Wildberries notified the suppliers of its right to deviate from the seller’s instructions on the price and apply discounts. The platform “fully controls the pricing”, can set a discount of 90% or 50% with a commission of 1%, and in case of refusal, the goods are removed from sale, the appeal says.
A Kommersant source in the e-commerce market notes that a large Russian marketplace, which “forcibly changes” the conditions for working with small businesses, gives rise to projects to tighten regulation: “It’s not clear why the industry should be collectively responsible.” Wildberries said that sellers are engaged in pricing themselves, as they make decisions about participating in any promotions.
Artem Sokolov, President of the Association of Internet Trade Companies, says that a large number of services operate in e-commerce and that suppliers have the opportunity to choose online platforms with the best conditions. “Private problems need to be solved privately,” he explains. According to Mr. Sokolov, marketplaces in Russia have been actively developing only since 2018, and premature government regulation will limit competition and negatively affect the convenience of services, which will affect both suppliers and, ultimately, consumers.
AliExpress Russia believes that the industry is more in need of a mediator between marketplaces and small businesses. Ozon says that most of the requirements from the concept are already fulfilled, and self-regulation is optimal for the market today. Baon President Ilya Yaroshenko notes that the basic things can be spelled out, but he is “a little afraid” of the regulation of a rapidly changing market.
Fyodor Virin, partner of the analytical agency Data Insight, points out that among the suppliers, in principle, there are few companies that have the capacity to manage prices and discounts, and marketplaces can compare the cost of similar products from themselves and competitors. The disclosure of the ranking mechanism, he said, threatens with cheats: suppliers will only follow the formula, and equal access will not allow marketplaces to offer better conditions to companies that need to develop a category or region.