The Competition Commission of India will resume its investigation into Amazon’s sales operations, which will review the company’s ڈالر 1 billion joint venture with British Chancellor Rishi Sink’s billionaire father-in-law.
The investigation, originally announced in January 2020, was overturned on Friday by an Indian court following requests from Amazon and its rival – Walmart-owned Flipkart – to cancel an investigation into the business practices of major US retailers. Will proceed after rejection.
One of the top sellers on Amazon.net is a company called CloudTail, a 1 1 billion business that is 76% owned by Sink’s wealthy in-laws, the Murthy family. The rest of CloudTell is owned by Amazon.
The Competition Commission of India (CCI) will look into complaints from a group of traders that small sellers are being evicted from their businesses because large US platforms are giving “priority sellers” preferential treatment.
Overseas companies, under foreign direct investment law Are prohibited Running an online retailer that holds inventory and then sells the goods directly to Indian consumers online. So, instead, US websites like Amazon.net are run as a “marketplace”, and Indian retailers sell their products through the site for a fee to the US company. Small traders allege they are being marginalized because US platforms may support some of the larger sellers, including CloudTail.
The issue is politically sensitive, as it has the potential to provoke millions of small internet retailers who are part of Indian Prime Minister Narendra Modi’s political base.
A source familiar with the CCI investigation confirmed that CloudTail was also involved in the widespread mistrust complaint.
Samat Agarwal, national secretary of the Confederation of All India Traders (CAIT), whose affiliation has complained to competition officials, said: “Especially in the e-commerce sector, foreign companies have made India a banana republic. Where there is no sanctity of laws, policies and regulations; unfortunately they are successfully violating the law and these policies have caused a lot of damage to the small traders of the country.
The trade body added that the decision “fully demonstrates CAIT’s position that the Amazon and Flipkart business model is based solely on violations of FDI policy, rules and other regulations and therefore more.” Without wasting time, the CCI should immediately begin its investigation. “
After the regulator announced its inquiry last year, US companies denied wrongdoing and a court stayed the investigation.
However, on Friday, Justice PS Dinesh Kumar of the High Court in the southern state of Karnataka said he was rejecting the petitions filed by Amazon and Flipkart, denying them any further relief, prompting the probe. The way to get started effectively is smooth.
It looks like the US companies’ decision will be appealed.
An Amazon spokesman said: “We will review the decision carefully and decide on the next steps.”
Flipkart did not respond to a request for comment.
When the competition panel actually ordered an investigation, it listed four alleged oppositions.
These were: Special launches of mobile phones by e-commerce firms. Promoting Favorite Sellers on Your Website Promoting Deep Discount Ways And prioritizing some seller lists over others.
Meanwhile, Amazon is also facing another complaint from CCI.
In august, The All India Online Vendors Association alleges that its members are being marginalized by Amazon India’s wholesale arm. Buying large quantities of goods from manufacturers and selling them at a loss to sellers such as CloudTail. It is then claimed that such sellers offer goods at huge discounts on Amazon.net.
The second complaint is understood to be still being considered by the CCI to decide whether it will make progress in the full investigation.
Amazon has said it complies with all the rules and its India website is a pure third-party marketplace where sellers have the discretion to decide product prices. Amazon has also said that its wholesale unit allows businesses to buy products and anyone can register on it.
GlideTel did not respond to a request for comment from the Guardian, but a spokesman for CloudTel said in response to a complaint in August that it was “complying with all applicable laws.”
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