CCI takes aim at sellers on Amazon, Flipkart

Reuters

NEW DELHI: India’s antitrust body launched searches early on Thursday against two top domestic sellers of online retail giant Amazon.com Inc, and some on Walmart’s Flipkart, following accusations of competition law violations, according to people with knowledge of the matter.

Indian retailers, key supporters of Prime Minister Narendra Modi, have long contended that Amazon and Flipkart’s platforms benefit a few big sellers, via predatory pricing, though the companies say they comply with all Indian laws.

The two Amazon sellers figuring in Thursday’s raids were Cloudtail and Appario, two people aware of the development said on condition of anonymity, as the details were not public. Two other people aware of the development said some sellers on Walmart’s Flipkart platform were also being raided by officers of the Competition Commission of India (CCI), but there were no immediate details.

“This is a significant development as generally CCI doesn’t do searches in non-cartel cases,” said a former official of the competition regulator. “Doing dawn raids to unearth complex economic activities is a new domain for the regulator.”

Amazon, which has an indirect equity stake in both the sellers raided, did not immediately respond to a request for comment, nor did Flipkart.

Cloudtail, Appario and the regulator also did not immediately respond to emailed queries.

One of the people mentioned above said the raids, carried out in New Delhi and Bengaluru related to an investigation the CCI ordered in January 2020. In that case, Amazon and rival Flipkart face accusations of anticompetitive practices, such as promoting preferred sellers on websites and giving priority to listings by some sellers. The antitrust investigation continues.

Amazon has said it “does not give preferential treatment to any seller on its marketplace,” and “treats all sellers in a fair, transparent, and non-discriminatory manner”.

A Reuters investigation last year, based on Amazon internal documents, showed it had given preferential treatment for years to a small group of sellers on its platform, including Cloudtail, and used them to bypass Indian laws. It showed Amazon had for years helped these sellers with discounted fees and was also helping Cloudtail strike special deals with big tech firms.

The investigation found that about 35 of Amazon’s more than 400,000 sellers in India in 2019 accounted for around two-thirds of sales on its India website. Of that figure, two sellers, Cloudtail and Appario, contributed 35% of the platform’s sales.

The anti-trust body told a court the Reuters report corroborated evidence it had received against Amazon.

MINT The probe found that 35 of Amazon’s over 400,000 sellers in India in 2019 accounted for around two-thirds of the total sales.