According to a legal document seen by Reuters, a group of more than 2,000 online sellers has filed an antitrust lawsuit against Amazon in India, accusing the American company of favoring certain retailers whose online discounts enable independent sellers. Unable to operate.
This case poses new regulatory challenges for Amazon in India. The company has pledged to invest US$6.5 billion (approximately 483.19 billion rupees), but it is still struggling with the complex regulatory environment.
According to court documents, in January, the Competition Commission of India (CCI) ordered an investigation into Flipkart owned by Amazon and its rival Walmart for alleged violations of competition laws and certain discounts, which poses a challenge to Amazon.
In the latest case, the All India Online Suppliers Association (whose members sell products on Amazon and Flipkart) claimed that Amazon was engaged in unfair business practices.
The organization claims that Amazon India’s wholesale department buys goods in bulk from manufacturers and sells them to sellers such as Cloudtail at a loss. Such sellers then offer goods on Amazon.in at a great discount.
The organization stated in a document submitted to CCI on August 10 that “this anti-competitive arrangement…by driving independent sellers out of the market, has led to the loss of opportunities for competition.”
Amazon did not respond to a request for comment. The company has previously stated that it complies with all laws in India and treats all sellers equally on its platform.
A Cloudtail spokesperson said it “complies with all applicable laws in its operations.”
Unlike cases in Indian courts, case files and detailed information reviewed by CCI will not be made public. In the next few weeks, CCI will review the case and may decide to open a wider investigation or dismiss it.
CCI did not respond to a request for comment.
Chanakya Basa, a lawyer for the seller’s team, confirmed the case to CCI, but declined to give details.
Indian regulations allow Amazon to operate an e-commerce market where sellers can pay to receive goods.
India tightened regulations last year to prevent high discounts, but small sellers still said that Amazon uses a complex business structure to bypass restrictions. The company denies this accusation.
The latest case file is over 700 pages and includes screenshots of a product list on Amazon.com, which shows some products, including groceries and detergents, which are discounted by 8% to 45% compared to retail prices on e-commerce sites.
The seller organization also claimed that Amazon charges lower fees to selected sellers, which actually makes it difficult for independent online retailers to compete on its website.
The organization stated in the document that Cloudtail is one of Amazon’s largest sellers in India, paying 6.3% of the handling fee to Amazon for electronic products, while independent sellers pay about 28.1% of the handling fee.
Amazon has stated that it will help provide an e-commerce platform for more than 650,000 sellers in India, who determine their own prices when they are listed.
© Thomson Reuters 2020
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