By Aman Shah and Nivedita Bhattacharjee
MUMBAI (Reuters) - India's largest online marketplace Flipkart said on Tuesday it would end talks with mobile operator Bharti Airtel Ltd to join its new marketing platform for mobile application makers.
Flipkart was in negotiations to join Bharti's Airtel Zero platform, where mobile application makers pay for data usage, which then enables customers to use applications for free.
"We will be walking away from the ongoing discussions with Airtel for their platform Airtel Zero," Flipkart said in a statement. "We will be committing ourselves to the larger cause of net neutrality in India."
This has prompted debate in India on social media, with activists and users arguing that such platforms go against the concept of net neutrality, where all traffic on the Internet is treated equally.
Critics say a lack of transparency and clear regulations in India may make it tough to check if large firms get preferential treatment by carriers over smaller rivals.
Some of India's small- and mid-sized e-commerce companies have complained that this could favor bigger companies and limit customer choice.
"What's beautiful about the Internet is that it is a leveler," Vikram Chopra, managing director of online furniture retailer Fab Furnish, said. "If one app is free, or loads faster than the other, it would skew usage and that is definitely a problem for those who are not on that group."
India's telecoms ministry has set up a panel to look into the issue of net neutrality and a report on its recommendations is expected in the second week of May, Telecoms Minister Ravi Shankar Prasad said on Monday.
Bharti Airtel said on Tuesday it backed net neutrality and that Airtel Zero was a toll-free data platform.
The company has received enquiries from over 150 start-ups in the past week and on average, expects the plan (Airtel Zero) to reduce marketing costs for partners by almost three quarters, Srini Gopalan, director-consumer business at Bharti Airtel said.
(Additional reporting by Tommy Wilkes in New Delhi; Editing by Sumeet Chatterjee and Jane Merriman)