Banning Online Vehicle Price Listing Backfires
Khosro Kalbasi -- Interview
With online platforms being barred from listing vehicle prices and extensive disruptions in the supply chain, the Iranian car market slid further into a murky state of disorder.
It has been a month since Iranian e-commerce websites were barred from listing car prices. Following the ban, dealers have started using social media platforms like Instagram and Telegram for advertising their wares.
In separate talks with the Financial Tribune, Information Technology Organization of Iran’s deputy for legal affairs, Mohammad Jafar Nanakar, the head of E-Commerce Union, Reza Olfatnasab, and CEO of e-commerce firm Sheypoor, Reza Arbabian, discussed the decision to ban online car price listing.
Ironically, no state entity officially announced the ban that is believed to have been implemented by the judiciary with the Industries Ministry’s tacit approval and the ICT Ministry’s explicit disapproval.
Censuring the ban as misconceived, Nanakar said, “State players should never implement measures that curb legal market transactions and push players underground.”
He emphasizes that imposing draconian laws and regulations lead to the creation of gray markets that authorities have close to zero oversight on.
“This is while by setting agile protocols and standardizing transactions, authorities can regulate markets and crack down on price gouging,” he added.
Over the past few months, the production rate of vehicles has nosedived in Iran. The supply chain disruption caused turmoil in the car market where racketeers roam freely.
In a move described by observers as sweeping problems under the carpet, state authorities accused online marketplaces—like Divar and Sheypoor—of being “dealers’ lair” before barring them from listing car prices.
Without mincing words, the legal expert says, “Solutions implemented by state agencies for regulating markets are outdated. In the age of the Internet and cyberspace, the business world has undergone profound changes. Therefore, legal frameworks and mechanisms must be reshaped to suit the needs of the current times.”
Nanakar noted that these startups have only set up platforms that ease business for other market players.
“By introducing safeguards and monitoring mechanisms, as well as setting up license agreements and protocols, these startups can help the authorities manage the market. However, no one should expect them to act in place of market regulatory bodies,” he said.
“You should keep in mind that implementing Know Your Customer solutions is a must for online platforms that offer sales services.”
KYC solutions are processes through which firms identify their customers and assess their credibility.
The ICT Ministry has launched a KYC system dubbed Shahkar. If the system delivers satisfactory results after test runs, all e-commerce firms will be obliged to employ the system for screening the identity of their users.
While acknowledging the efficiency of an open market approach, Nanakar said, “When corporations manipulate markets to double their gains, state intervention is inevitable.”
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