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The Competition Commission of India (CCI) has conducted raids against some of the top domestic sellers listed on Flipkart and Amazon following accusations of a breach of competition laws.
The Confederation of All India Traders (CAIT), a body of retailers, has claimed for a long time that only a few big sellers benefit from e-commerce platforms like Amazon and Flipkart through predatory pricing and discriminatory marketing.
Some of the offices raided included Cloudtail, the largest seller on Amazon, and Appario. Details of other sellers were not disclosed by the sources. These companies have claimed that they always followed all relevant laws.
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Anonymous sources disclosed that these raids were conducted in connection with an investigation ordered by the CCI in January 2020. It was a case where Amazon and Flipkart were accused of discriminatory practices, such as promoting preferred sellers on their platforms and giving them a higher ranking on product listings.
Amazon holds a direct stake in both Cloudtail and Appario and the said stake has been under fire for a long time. Recently, it was announced that all employees of Cloudtail and Prione Business Services will be absorbed into Amazon India. Cloudtail had also sent termination notices to its vendors recently.
"It is a much-awaited welcome step of CCI which will surely vindicate the substance of various complaints made by the CAIT against Amazon and Flipkart. For the past three years, the CAIT has been raising strong objections against mal-practices of Amazon & Flipkart and filed complaints with CCI besides strongly fighting delaying tactics of Amazon & Flipkart in various courts as well," said CAIT secretary general Praveen Khandelwal, while commenting upon the action of the CCI.
Khandelwal has demanded an investigation into Mr. Narayana Murthy, founder of Infosys and partner in the JV with Amazon which formed Cloudtail.
Moreover, a Parliamentary panel has summoned representatives from several global tech giants like Google, Amazon, Twitter, and several others to examine their competitive behavior. These summons were made after the CCI alleged that these tech platforms were engaging in practices that adversely impacted competition in the market place.
Article by Aman Agarwal.
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