Aram Ter-Ghazaryan How the Internet was destroyed in a “sandbox fight” in Cherkizon What threatens the marketplaces with the new law on online commerce 14.07.2023, 11:11

Post-Soviet capitalism is almost 35 years old, and businessmen have not yet learned how to resolve disputes without conflicts, blackmail, media hysteria and court staging. The market model, in which the interests of the parties are represented by associations, unions and trade unions, as in many countries of the world, remains a dream for us.

Entrepreneurs, like belligerent spouses, get stuck in one destructive pattern of behavior and are so fundamentally unwilling to change that at times their disagreements are resolved at the top.

Splits in the online commerce market are emerging. On July 10, the President signed the Antitrust Restrictions on Digital Platforms Act, curbing the turmoil caused by marketplaces. Online trading platforms, at their discretion, imposed fines and penalties on merchants and forced them to participate in promotions. Of course, it is great that the government cares about the welfare of medium, small and even micro enterprises, but still in other countries such decisions are made by professional societies, not by heads of state.

Presidents and prime ministers in general always had enough to do besides protect sellers of Chinese clothing from the encroachments of online marketplace owners. Two years ago, this was also impossible in Russia: the Federal Antimonopoly Service, the prosecutor’s office, the Ministry of Industry and Trade, together with deputies, would quickly and smoothly resolve all issues. But now the state is more interested than ever in protecting the interests of small businesses, which is why millions of individual entrepreneurs are given such clear signals – we are for you guys. This is due to the unstable political and economic situation in the world, where Russians need to feel confident and calmly make plans for the coming years.

The history of the law’s adoption is sad: strikes of vendors, distribution point owners and warehouse workers took place in the country for almost a year and a half. The greed of the marketplaces reached the point where, during the fighting in Belgorod Shebekino, Wildberries distribution points evacuated their employees along with the whole city and fined them for not staying at their workplaces. Marketplace workers responded to this attitude as best they could: cases of mass theft from warehouses, damage to goods and their replacement with cheap analogues are known throughout the country.

But if the marketplaces deal with offended employees in their own way, then from September 1, the marketplaces themselves will come under close scrutiny of the state. The law has been signed, which means that all participants in online commerce must understand that no violation goes unpunished.

Everyone violated the rules of fair trade: marketplaces forced sellers to reduce the cost of goods by up to 80%, that is, to attract customers, that is, ruined them, and sellers lined up unsold goods under the guise of a new batch. Raising their stores in rankings and tricking them with reviews. At the same time, both sides played with taxation. Not to mention that trading platforms have become a source of income for thousands of scammers. Simply put, within two or three years, Russian online commerce has turned into an all-Russian Internet Cherkizon.

Almost everywhere in the world, and theoretically in Russia, the free market is governed by supply, demand and corporate advocacy. Unions advocate for workers’ rights, small business associations oppose corporations, and market place owners in their small circles decide how to increase profits rather than anger vendors. The owners of some marketplaces in Russia decided that they were allowed to do anything by starting to act like brash teenagers shoveling kids in a sandbox. “Children”, of course, complained to adults, namely to the deputies of the State Duma. As it usually happens, those who don’t really understand the details get things in order.

It was worth understanding because some of the rules regarding online commerce in the new law are quite vague. For example, use if the marketplace will create a network effect, that is, what unites a large number of buyers and sellers around itself, increases the cost of advertising, or lowers prices to an unacceptable level for sellers. Before the current law was passed, the network effect was determined by the number of transactions. From September 1, the opportunity to have a “decisive influence” on the market will be considered.

Experts will evaluate the strength of the impact according to their well-known criteria. It is clear that the exam will be objective and professional. And of course independent. However, it remains unclear what to do with the previous methodology that took into account the number of transactions. Will it be used as it has not been cancelled? This was not disclosed in the new law. It’s also unclear when authorities will identify network impact by counting transactions, when to measure “determinant impact”, and what will drive method choice.

The law signed by the president is aimed at the biggest players. The era when marketplaces could profit from ordinary vendors with impunity is over. Marketplaces quenched their thirst for snow.

This may be due to both pathological greed and the desire to “cut the dough as soon as I come in for work”, or perhaps both. If some websites hadn’t taken such an aggressive stance against hundreds of thousands of vendors during special operations, they would have continued to operate according to their own rules without attracting the attention of the authorities. And sellers would reluctantly pay fines and participate in promotions, of course. But if, during a special operation, the business community imposes unreasonable penalties on its partners in excess of the amount of monthly profits, and the applied shares make the business unprofitable, then even the most loyal state to monopolies will take over its activities.

The author expresses his personal opinion, which may not coincide with the editors’ position.



Source: Gazeta

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