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Increased regulatory oversight awaits e-commerce companies in 2025 – Industry News

Increased regulatory oversight awaits e-commerce companies in 2025 – Industry News

In 2025, e-commerce giants like Amazon and Flipkart are expected to face increased regulatory scrutiny as the government strengthens measures to safeguard competition and protect consumer data.

Key legislative changes, including the implementation of the Digital Personal Data Protection Act (DPDP) and the upcoming Digital Competition Bill, are expected to reshape the operating landscape for these companies.

The Competition Commission of India (CCI) is already investigating Amazon and Flipkart over allegations related to preference given to certain sellers on their platforms. The Enforcement Directorate (ED) has already conducted searches at 19 locations, based on information that these companies were maintaining prohibited control over the sellers’ stocks. Regulations require e-commerce platforms to operate solely as marketplaces, without directly holding inventory.

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Pricing practices have also come under scrutiny. Trade and Industry Minister Piyush Goyal has criticized Amazon’s significant financial losses, suggesting they could be a sign of predatory pricing tactics intended to stifle competition.

Once implemented after the rules are notified, the DPDP Act will impose strict rules on the collection, use and protection of consumer data. E-commerce platforms will be required to collect only data essential to their services, to clearly communicate the purpose of collecting the data and to be able to retain it only until the period indicated by users.

A PwC report highlights the challenges these regulations pose for e-commerce companies, which currently handle large amounts of sensitive consumer information, including transaction history and personal data. Businesses will need to overhaul their systems, processes and technologies to ensure compliance.

The proposed Digital Competition Bill aims to curb monopolistic practices in the digital economy. It introduces the concept of Systematically Important Digital Enterprises (SSDEs), targeting large platforms that meet specified financial and user thresholds.

These designated entities will be required to follow fair business practices, prohibit self-referencing and avoid anti-management tactics. The ICC will serve as the primary regulatory body responsible for enforcing these provisions.

Besides regulatory challenges, e-commerce giants will likely face increased competition from fast-commerce players such as Blinkit (Zomato), Swiggy’s Instamart and Zepto.

In response, Amazon and Flipkart have started piloting their fast commerce projects in Bangalore, signaling their intent to capture a share of this fast-growing segment.

Artificial intelligence (AI) is expected to redefine e-commerce operations, improving personalization and customer engagement. Flipkart has already introduced a virtual assistant named Flippi, while Amazon India’s conversational assistant Rufus is making headway. However, industry experts highlight the need for further advancement in AI tools to meet consumers’ growing expectations for seamless and personalized shopping experiences.

As e-commerce platforms prepare for increased regulatory scrutiny and changing market dynamics, their ability to adapt will determine their success. Improved compliance frameworks, robust data protection measures and innovative technologies will be essential to meet future challenges and support growth in a competitive market.