Govt probing Flipkart, Amazon over discounts
E-COMMERCE COMPANIES HAVE NO RIGHT TO OFFER DISCOUNTS OR ADOPT PREDATORY PRICES. SELLING PRODUCTS CHEAPER, RESULTING IN LOSSES FOR THE RETAIL SECTOR, IS NOT ALLOWED
The government is probing e-commerce majors Flipkart and Amazon over alleged predatory pricing, Commerce Minister Piyush Goyal said on Thursday. Warning of stringent action in accordance with the law for any violation, Goyal said a detailed questionnaire had been sent to the two companies and their response was awaited. According to media reports, Flipkart and Amazon have grossed over $3 billion in gross merchandise value during the festive sales held over the past fortnight, which typically see over half of their annual sales.
“E-commerce companies have no right to offer discounts or adopt predatory prices. Selling products cheaper, resulting in losses for the retail sector, is not allowed,” Goyal told reporters here.
They were also not permitted to own products and sell them, he said, adding that they were only platforms helping sellers connect with potential buyers.
Without specifying the exact transgressions, Goyal said his ministry had received complaints from the Confederation of All India Traders (CAIT) alleging violations of norms by these players.
“A detailed questionnaire has been sent to them. Today or tomorrow, a supplementary questionnaire will also be sent," he said, reminding that he had earlier also warned e-commerce players.
“We will take stringent action against them if there is violation of any law in letter or in spirit. The law is clear,” he said.
CAIT in a letter on Monday had urged Goyal to order an audit into the business model of all e-commerce firms and the foreign-owned Amazon and Flipkart in particular.
In the letter, CAIT also said since Amazon and Flipkart claimed that individual brands were offering discounts, the government should convene a meeting with major brands to ascertain the truth.