Wednesday, 25 May, 2022
HomeEconomyAmazon faces new antitrust case, over 2,000 online sellers move CCI, says...

Amazon faces new antitrust case, over 2,000 online sellers move CCI, says report

Amazon favours select retailers who give online discounts, driving independent vendors out of business, alleges the All India Online Vendors Association.

Text Size:

New Delhi: A group of over 2,000 online sellers has moved the Competition Commission of India (CCI) with an antitrust case against Amazon in India, a Reuters report said citing legal filings.

The All India Online Vendors Association has alleged in its 10 August filing that the e-commerce giant favours select retailers who give online discounts that drive independent vendors to shutter their businesses, said the report.

The group has claimed that Amazon India’s wholesale unit buys products in bulk from manufacturers and then sells it at a loss to sellers like Cloudtail. These sellers then offer goods on Amazon.in at “big discounts”, said the report.

“This anti-competitive arrangement… is causing foreclosure of competition by driving independent sellers out of the market,” the report quoted the group as saying in its filing.

The CCI may dismiss the case or order a wider investigation after reviewing the case, it added.

In an emailed statement on the row, an Amazon spokesperson told ThePrint, “Amazon.in is a pure 3P [third party] marketplace. Sellers on Amazon.in have the absolute discretion to decide what products to sell and their prices. Amazon is compliant to all relevant laws of the land and operates the marketplace with high degree of transparency and uniformity.”

The Reuters report quoted a Cloudtail spokeswoman to say that the seller is in “compliance with all applicable laws in its operations”.


Also read: Chinese tech giant Alibaba puts investment plans for India on hold amid ‘souring relations’


Other allegations

This is the latest in a series of regulatory battles that Amazon faces in India, where it has committed a $6.5 billion investment.

In January, the CCI had ordered an investigation into Amazon and Walmart-owned Flipkart over charges that the e-commerce firms violate competition norms, and discounting practices. Amazon is challenging the CCI probe, said the report.

Last year, India tightened rules to discourage steep discounting on e-commerce sites, but small sellers say Amazon uses “complex” business structure to bypass these restrictions, an allegation that the company denies.

In its new CCI filing, the All India Online Vendors Association has also alleged that Amazon charges “lower fees to selected sellers”, making it difficult for independent online sellers to compete on the platform.

The group has alleged that Cloudtail, described as “one of Amazon’s biggest India sellers”, pays a fee of 6.3 per cent to Amazon for electronic products. However independent sellers pay around 28.1 per cent.

Amazon didn’t respond to ThePrint’s query on the allegation about the disparity in fee charged from different sellers.

However, its spokesperson said, “Amazon Wholesale Pvt Ltd (AWIPL) operates a B2B marketplace (amazondistribution.in) where 3.5 lakhs of small and medium offline sellers buy different category of products for resale to customers or for institutional consumption. Any B2B seller can register and purchase from Amazon distribution.”


Also read: These 2 Indian companies have zero sales but their stocks have soared like crazy rockets


 

Subscribe to our channels on YouTube & Telegram

Why news media is in crisis & How you can fix it

India needs free, fair, non-hyphenated and questioning journalism even more as it faces multiple crises.

But the news media is in a crisis of its own. There have been brutal layoffs and pay-cuts. The best of journalism is shrinking, yielding to crude prime-time spectacle.

ThePrint has the finest young reporters, columnists and editors working for it. Sustaining journalism of this quality needs smart and thinking people like you to pay for it. Whether you live in India or overseas, you can do it here.

Support Our Journalism

Most Popular

×