Amazon accused of unfair business practices in India: Details here
Amazon's antitrust troubles are not just limited to the United States or the European Union. The Jeff Bezos-led e-commerce giant has also been slapped with an antitrust case in India, which alleges that it is hitting the businesses of small sellers operating on its platform through unfair and anti-competitive practices. Here is all you need to know about it.
Case by All India Online Vendors Association
As reported by Reuters, the All India Online Vendors Association (AIOVA), a group representing over 2,000 online sellers, has filed a 700-page complaint against Amazon with the Competition Commission of India. The Commission, as many know, is a statutory body of the Government of India and responsible for enforcing The Competition Act, 2002, aimed at preventing activities that may affect competition in the country.
How Amazon has been hitting these sellers?
In the complaint, filed on August 10, AIOVA members have accused Amazon of offering steep discounts on certain products through its partner sellers and driving them out of business. They claim that the company's wholesale arm buys bulk goods from manufacturers and sells those items at a loss to favored sellers like Cloudtail, enabling them to offer tempting deals to the end-consumers.
Several examples of massive discounts cited
To back their allegations, the sellers have also shared screenshots of products, including groceries and household essentials, listed on Amazon.in with discounts ranging between 8% to 45% on the retail price. "This anti-competitive arrangement is causing foreclosure of competition by driving independent sellers out of the market," the group alleged in the filing, which is expected to be reviewed in the coming days.
Amazon also accused of charging lower fees from favored sellers
Beyond discounts, the sellers have also accused Amazon of charging a lower fee from certain sellers. They claim that Cloudtail, one of the biggest sellers of the e-commerce company, pays a 6.3% fee on electronic goods, while other, independent sellers have to pay 28.1% for those exact same products. However, Cloudtail told Reuters it is in "compliance with all applicable laws in its operations."
CCI could launch a broader investigation
After a review of the case, CCI may launch a broader probe into Amazon's discounting practices and the fees charged from sellers. Notably, the Commission is already investigating the company, along with its rival Flipkart, over allegations of malpractices like giving heavy discounts, having preferred sellers, listing and promoting their own private labels, and entering into exclusive deals to launch high-demand phones.
