The Covid-19 pestilence has ushered in an era of digital boom. All our activities ranging from studying in the classroom to meeting with our friends have all become digital. In order to evade the deadly virus, people are now shopping online via apps like Amazon, Flipkart. As a ramification of it, the sales of these giant multinational companies are mushrooming while the sales of poor shopkeepers are nosediving.
The conflict between the online sellers and brick and mortar sellers is not a new issue. The issue has been in the national media over the past four years. Confederation of All India Traders (CAIT) has accused Amazon and Flipkart of violating the Foreign Direct Investment in order to gain advantages over the brick and mortar sellers.
Everyone has a right to work, to free choice of employment, to just and favorable condition of work and to protection against unemployment Article 23(1) of Universal Declaration of Human Rights
The article makes it vivid that the existence of the “just and favorable condition of work” is a basic human right.
There are many instances where the fair practice of trade has been violated in India. For example, we can look at the issue of cashback. During the festival season, these e-commerce giants offer bulk discounts in the form of cashback. The same facility is not available at a small store that is selling the same stock as that of these e-commerce companies. These companies are using their power to tie up with the big banks and corporations to lure the customers to their platform thereby creating an unjust business environment. This is a blatant violation of the right of an individual who is facing loss in his business due to this partnership of big companies.
The CAIT has accused the e-commerce companies of engaging in the practice of deep price discounts. It alleged that by offering goods at a low price, the companies are capturing the retail market in an unethical way. Due to this unethical practice, the brick-and-mortar shopkeepers are struggling even to meet their variable costs. The shopkeepers cannot afford to sell goods at such low prices and are losing their customers. The hard work which these shopkeepers put in to establish themselves is going to the dustbin due to unfair deep discounted practice. Praveen Khandelwal, the secretary-general of the CAIT had once told that “ Trade in the mobile sector has fallen to about 60 percent whereas in other sectors it has registered a decline of 30-40% sales.” Instead of competing with brick-and-mortar stores, the companies are using price as a tool to expand their business.
It is a recognized human right that everyone has a right to earn livelihood to fulfill his basic needs. The shopkeepers are working with this objective. However, the objective of these e-commerce companies seems to be different. In the financial year 2018-2019. Flipkart India suffered a loss of more than three thousand crores. It is clear that a deep-discounting policy is not a just and favorable business practice to be followed. The deep-discounting policy is violating the human right to carry on trade freely.
In the year, 2019, the CAIT had launched a protest movement against the unethical trade practice of Amazon and Flipkart. The traders protested at roads and sought to have a meeting with the Trade and Commerce Minister, Piyush Goyal and the Prime Minister, Narendra Modi They protested for more than two months but they did not meet the traders. On the other hand, when Jeff Bezos came to India in January 2020, the ministers met him in spite of protest from the traders. In order to assuage some people who became critical of Amazon, he promised to invest one billion dollars in India. Article 21 of UNDHR states – “ Everyone has the right to take part in the government of his country, directly or through his representative”. The traders were just exercising this right to express their grievances to the government. The government should have listened to these traders.
Both Amazon and Flipkart has asserted that they are not responsible for selling the products. It is the sellers who sell products through their platforms. On looking at the list of the sellers on these platforms, we can deduce there is a list of preferred sellers who accounts for more than eighty percent of sales on these platforms. For example, Cloudtail is the leading seller on Amazon. Cloudtail is owned by Prione Business Services, a joint venture between Amazon India and Catamaran Ventures. Catamaran Ventures is owned by NR Narayan Murthy, founder of Infosys. Thus, we can see that these platforms do not even provide equal opportunity to the traders who decide to sell their products on these platforms.
In India, brick and mortar stores account for the employment of about 30 percent of the population. The lack of growth of these stores is causing loss of income not only to the shopkeepers but also to the salesmen who work in these shops. The livelihood of these people is in peril and there is a constant fear of unemployment in the minds of those who work in these stores. Article 23(1) of UNDHR mandates that there must be “protection from unemployment”.
Thus, it is manifest that the current e-commerce model of Amazon and Flipkart is violating the basic human rights as guaranteed under the Universal Declaration of Human Rights, 1948. The government by not taking actions against these companies are violating the fundamental right, freedom to carry on trade and profession as enshrined under Article 19 of the Indian Constitution.
Since India is a signatory party to UNDHR, it is mandatory for the government to secure these rights for the people of India. There is a need for the government to take up steps to protect the livelihood of these traders along with it promote its flagship program of Digital India. Instead of encouraging multi-national companies to start retail trade in India, the government should promote an indigenous platform for traders. For instance, the Bharatemarket platform launched by CAIT must be encouraged. This platform has the active involvement of the small traders. Thus, it is healthy for both the promotion of the digital economy and the welfare of brick-and-mortar stores. In order to finish the problem of price-predatory and cashback, the government can come up with fair price legislation. As per this law, the company will fix the minimum retail price for their products. It will eliminate the price competition and provide more efficiency to the customers. By doing these steps, India will be able to secure human rights of equal opportunity and the right to protection against unemployment.