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.
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