India may soon ask Flipkart, Amazon and e-commerce giants to disclose source code and algorithms

By Digit NewsDesk | Published on 06 Jul 2020
HIGHLIGHTS

The latest draft of the national e-commerce policy asks e-commerce companies to disclose their source codes and algorithms.

The source code and algorithms are often kept confidential and protected by the e-commerce companies.

This will be done to ensure there are no biases induced by these algorithms that affect the right to equality.

India may soon ask Flipkart, Amazon and e-commerce giants to disclose source code and algorithms

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The draft e-commerce policy by the Indian government, that’s brewing since 2019 had earlier asked for data localisation and maintenance of a level playing field. Now, the The draft e-commerce policy by the Indian government, that’s brewing since 2019 had earlier asked for data localisation, and maintenance of a level-playing field. Now, the latest draft of the policy has also added a clause wherein e-commerce giants like Amazon and Flipkart may have to disclose source codes and algorithms they deploy, as a way to weed out “digitally induced biases”. The section 4.10 of the proposed draft policy prepared by the Ministry of Commerce’s Department for Promotion of Industry and Internal Trade, reads: “In continuation, it is also important for the Government to reserve its right to seek disclosure of source code and algorithms. There will be a greater reliance on AI in decision making in future where parts of the process will become ‘AI-fied’. Decisions will need to be explained. There is a need to strike a balance between commercial interests and consumer protection issues, as well as issues of larger public concern, like preventing racial profiling and maintaining constitutionally mandated rights, such as the right to equality.” In short, the source code and algorithms, which are often kept confidential and protected, will have to be disclosed for e-commerce giants to continue operating in the country. This will be done to ensure there are no biases induced by these algorithms that affect the right to equality. It would also allow the government to verify if these firms are employing ‘explainable AI’, or something that follows sound logic. The draft policy also mandates the government to appoint an e-commerce regulator to ensure there’s no anti-competitive practices. Furthermore, online shops will have to specify a product’s country of origin, and how much India played a role in making it. Online stores will also have to disclose the contact details of the sellers, to better protect the consumer. The policy will be open to comment from stakeholders on a government website. With one of the largest markets in the world, e-commerce giants like Amazon and Flipkart may have no choice but to give up their secret sauce recipe if they want to operate in India. On the flip side, disclosing how the algorithms work will lead to more transparency in shopping and help prevent monopolistic tendencies and abuse of a dominant market position.atest draft of the policy has also added a clause wherein e-commerce companies like Amazon and Flipkart may have to disclose source codes and algorithms they deploy, as a way to weed out “digitally induced biases”.

Section 4.10 of the proposed draft policy prepared by the Ministry of Commerce’s Department for Promotion of Industry and Internal Trade, reads:

“In continuation, it is also important for the Government to reserve its right to seek disclosure of source code and algorithms. There will be a greater reliance on AI in decision making in future where parts of the process will become ‘AI-fied’. Decisions will need to be explained. There is a need to strike a balance between commercial interests and consumer protection issues, as well as issues of larger public concern, like preventing racial profiling and maintaining constitutionally mandated rights, such as the right to equality.”

In short, the source code and algorithms, which are often kept confidential and protected, will have to be disclosed for e-commerce giants to continue operating in the country. This will be done to ensure there are no biases induced by these algorithms that affect the right to equality. It would also allow the government to verify if these firms are employing ‘explainable AI’, or something that follows sound logic that does not discriminate.

Flipkart, Amazon and e-commerce giants could disclose source code and algorithms

The draft policy also mandates the government to appoint an e-commerce regulator to ensure there are no anti-competitive practices. Furthermore, online shops will have to specify a product’s country of origin, and how much India played a role in making it. Online stores will also have to disclose the contact details of the sellers, to better protect the consumer.

The policy will be open to comment from stakeholders on a government website.

With one of the largest markets in the world, e-commerce giants like Amazon and Flipkart may have no choice but to give up their secret sauce recipe if they want to operate in India. On the flip side, disclosing how the algorithms work will lead to more transparency in shopping and help prevent monopolistic tendencies and abuse of a dominant market position.

In other Flipkart and Amazon news, it looks like the PS5 coming to India late 2020, having already been listed on both Amazon and Flipkart. You can read more about that here. In fact, just a few weeks ago, there was some speculation that Amazon may have revealed the price of the PS5 as well. You can read more about that here

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