Following allegations of competition law breaches, India’s antitrust body launched raids early on Thursday on two of Amazon.com Inc.’s most important home sellers, as well as a few on Walmart’s Flipkart, according to individuals familiar with the situation.
Indian retailers, who are strong supporters of Prime Minister Narendra Modi, have long maintained that Amazon and Flipkart’s platforms benefit from predatory pricing that Favours a few large sellers, despite the fact that the companies claim they comply with all Indian legislation.
The two Amazon sellers that were targeted in Thursday’s searches were Cloudtail and Appario, according to two individuals who spoke on condition of anonymity since the raid’s major elements were not made public.
According to two independent sources, inspectors from the Competition Commission of India (CCI) have searched several vendors on Walmart’s Flipkart site as well, although there have been no immediate reports of any major findings.
A former official of the competition agency told Reuters that this is a noteworthy step since the CCI normally does not conduct searches in non-cartel cases.
According to the regulator, “doing dawn raids to expose complicated economic activity is a new arena for them.”
Amazon, which has an indirect financial interest in each of the merchants raided, did not immediately respond to a request for comment, and neither did Flipkart.
Emailed questions were also not immediately responded to by Cloudtail, Appario, or the regulatory authority.
According to one of the sources, the searches, which took place in New Delhi and Bengaluru, were in connection with an inquiry authorized by the CCI in January 2020.
Consequently, Amazon and competitor Flipkart are accused of anti-competitive activities akin to selling the most popular sellers on web sites and providing priority to listings from certain vendors in that scenario. The inquiry into antitrust violations continues.
The online retailer has previously maintained that it “does not provide preferential treatment to any seller on its marketplace” and that it “treats all vendors in a fair and transparent way that is non-discriminatory.”
According to a Reuters investigation last year, which was based on Amazon internal documents, the company had given preferential treatment to a small group of sellers on its platform, including Cloudtail, for years, and had used them to avoid Indian regulations in order to do business in the country.
It revealed that Amazon has been assisting such vendors for years with cheaper rates and other perks, as well as assisting Cloudtail in negotiating special deals with major technology firms.
According to the findings of the inquiry, about 35 of Amazon’s more than 400,000 sellers in India in 2019 accounted for almost two-thirds of all sales on the company’s India web page.
Two retailers, Cloudtail and Appario, accounted for 35% of the platform’s total sales, according to this figure.
When the anti-trust panel received confirmation of its evidence against Amazon from Reuters, it notified a court of its findings.
Amazon and Cloudtail reached an agreement in August that the latter will cease to be a dealer as of May 2022.
Edited by =- Vanshika Sahu
Published by – Mohd Faizan