Iranian Online Businesses to Get Own Guild

EghtesadOnline: In a new move to boost e-commerce and Internet-based services, the Ministry of Industries, Mining and Trade is set to create a specialized guild for companies active in the sector.

News ID: ۷۴۲۱۸۷

17 June 2017

The High Commission for Supervision of Guilds — which is headed by the industries minister — has been tasked with the establishment of the new body. The businesses active in the sector can register for membership, the process of which opened on June 6 and will continue till June 27, local technology website Zoomit.ir reported.

Several other senior government authorities are members of the commission including the ministers of justice, cooperative, labor and social welfare, and culture.

Furthermore, members of the board of directors of Iran’s Chamber of Guilds, sit on the commission along with members of parliament (Majlis), according to Financial Tribune.

However, some in the field have criticized government oversight of the guild, while others believe if professionals active in the sector head the guild it would be much better.

One of the other points that has been emphasized is that the guild should have authority over the sector in order to be effective.

Several guilds created so far don't have clout, and are only mouthpieces for different sectors. Many are worried that the new guild might face the same fate.

> Naysayers

The main opponent of the planned guild is Iran ICT Guild, which claims that all the services that the new guild is supposed to provide are already offered by them.

Furthermore, ICT Guild says such overlapping will only intensify the confusion already plaguing the sector.

In a statement, its public relations office criticized the plan saying, “The creation of the new guild will lead to irreversible harm to the sector.”

This is not the first time that the ICT Guild has taken such a stance. Earlier, at a press briefing, Naser-Ali Sa'adat, head of the guild said “Creation of a new guild would be against the law.”

However, Sa'adat did not cite the relevant law that would be infringed.

He further said that “Iran’s ICT Guild is in charge of providing the permits.”

> The Other View

One of the critics of the scheme is Iran Online Businesses Guild (OBG). However, unlike the ICT Guild, OBG has taken a more moderate stance.

Director of OBG, Reza Olfatnasab, believes that instead of boycotting the new guild, professionals active in the sector should join it and try to draw on the opportunities the new organization will offer.

Olfatnasab also acknowledged that businesses will profit from direct communication and collaboration with the government through the new guild.

“The ICT Guild’s ineffectiveness and inability to solve the problems of the sector has led to the creation of the new guild,” he concurred.

In recent years, the ICT Guild has tried to counter the pressure on Internet-based firms — pressure and obstacles imposed by conventional businesses that say the online guys are "poachers".  However, the guild has more often than not failed its members.

Offices of startups and online businesses have been shut down frequently, and it has always been the government that has ultimately stepped in to help, he said.

Olfatnasab further added that the companies which have the backing of the ministry and the Chamber of Guilds have never faced "stone walls" that others despite ICT Guild permits face.

On top of this, several private companies say that the new guild with the backing of the ministry will have more leeway and provide the support that the businesses need.

The major problem of knowledge-based companies using Internet is getting permits. Companies in the sector face problems in regard to paying taxes, how their tax is calculated, and the regulations related to their employees.

Earlier the government created a commission which assisted the Internet-based firms providing them with legal advice. According to ministry officials, the new guild will also provide such services to the online businesses.

In a recent interview, the CEO of Tap30 — Iran’s second largest ride-hailing services — Milad Monshipour said, “Half of our resources are spent on legal battles and trying to prove that we too have the right to exist!”

"By the end of the day, it does not matter whether the government has oversight on the guild of the online business or not. The only issue is surmounting the obstacles that the companies face,” he said.

Moreover, some of the major players in the sector believe government monitoring does not have any negative impact. Hamid Mohammadi, CEO of Digikala — Iran’s largest online retailer, says, “The oversight and assistance will improve relations between Internet-based and conventional businesses.”

The Iran IT Union has also put out an official statement backing the establishment of the new guild.

According to the head of the union Mahdi Mirmehdi, the local Internet-based business has grown exponentially in recent years. Iran has more than 2,500 online businesses.

He said the vast number of companies operating in the sector is and of itself enough reason for the establishment of a specialized organization for stakeholders in the sector.