Raid on e-commerce companies: Amazon-Flipkart involved in giving more concessions to certain sellers, CCI took action

Posted on 29th Apr 2022 by rohit kumar

The Competition Commission of India (CCI) on Thursday morning raided the locations of major sellers selling products on the e-commerce platform of Amazon and Walmart's Flipkart. The raids took place at two sellers of Amazon and Walmart's Flipkart in Delhi and Bangalore.

 

It is alleged that both the companies favored these sellers by providing unethical facilities on their online platforms, which enabled them to sell more products than other sellers. Considering these allegations against the free competition of the market, the Commission has been investigating since January 2020.

 

There were several allegations against Amazon and Flipkart by Indian retailers. According to them, large sellers get special preferences, similar products are sold at a lower price, and e-commerce companies also help them with data related to the buying habits of customers stored on their websites.

 

Amazon's business share with sellers also

 

Amazon sellers Cloudtail and Aparicio have been raided. Amazon has an indirect stake in both businesses. However, the company has not yet issued an official statement. Last time he said that Amazon treats all sellers equally, and does not give preference to anyone.

 

Why the suspicion of fraud increased

 

4,00,000 sellers were selling their goods on Amazon in 2019

 

35 sellers were doing two-thirds of the sales, even in two-thirds, 35 percent of sales were from Cloudtail and Aparicio alone

 

To protect its image last year, Amazon said that Cloudtail would no longer be a seller after May 2022.

 

Revealed so far...

 

Amazon's internal documents show that certain sellers have been preferred over the online platform over the years. Cloudtail includes these. For this, the laws of India were broken. Sellers got exemption in e-commerce fees, Amazon also helped in getting special deals to sell products of big tech companies exclusively.

 

CCI's activism important

 

A former CCI official said that the agency does not take such action unless the case is related to a big cartel. The latest action is significant as these companies are linked to Amazon. Through this, the CCI is understanding the complex business process about which the allegations were made. This is also a completely new area for the Commission.

 

A parliamentary committee will send summons to social media and tech companies

 

The Parliamentary Committee on Finance will be sent a summons to the world's leading tech, social media, and e-commerce companies. Through this, their competition policies will be investigated and questioned. These companies include Apple, Google's proprietary company Alphabet, Facebook's proprietary company Meta, Amazon, Walmart's Flipkart, and Microsoft. It is believed that this step was taken because of the deal being done by Elon Musk to buy Twitter.

Amazon threatens in Australia, refuses to share product discovery system

 

Amazon took a jibe in Australia, saying it would not reveal how the search for a product on its platform works. It has categorically refused to give data on product search algorithms to the Competition and Consumer Commission here. This disclosure was made by the ACCC itself in its report on Thursday.

 

Facebook-Google-like dispute likely to arise

 

By not giving information to the commission, Amazon can bring back the situation in 2021 like the dispute between Facebook and Google with the government of Australia. Both these companies threatened to shut down their services in Australia because the government had asked the newspapers to pay royalties on the earnings of tech companies from the newspaper content.

 

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