Fair trade regulator CCI on Monday filed an inquiry against e-commerce majors Flipkart and Amazon for alleged violations, including deep discounting and tie-ups with approved sellers on their policies. The order follows a charge filed by Delhi Vyapar Mahasangh, whose members include many traders dealing in smartphones and similar accessories.
The Competition Commission of India said that it was ordering a wider inquiry following a survey of charges that Amazon and Flipkart were favoring some “preferred agents” and in turn punishing businesses of other smaller retailers.
The two firms did not immediately reply to a request for judgment on the antitrust move. According to the petitioner, Flipkart gives extensive discounts to select selected sellers, namely Omnitech Retail. As for Amazon, Cloudtail India and Appario Retail have been identified by the applicants. Cloudtail India, a joint enterprise between Amazon and Catamaran Ventures, is a wholly-owned subsidiary of a common venture among Amazon and Ashok Patni.
The probe order comes in a week when Amazon chief Jeff Bezos is supposed to visit India for a business event and potential conferences with government leaders.
The accusation against the two enormous groups was filed by Delhi Vyapar Mahasangh, a group serving small- and medium-sized companies, which claimed that some of Amazon and Flipkart’s favored sellers were affiliated with or managed by the firms themselves, either directly or obliquely.
The board had stated that it could interrupt, on a case-by-case basis, in affairs where unfair conditions or price is forced through contractual terms by an enterprise that is powerful in the relevant market.
Praveen Khandelwal, Secretary-General of the Confederation of All India Traders (CAIT), which is creating an aggressive national movement against Amazon and Flipkart, embraces the antitrust body’s order.
“Both Amazon & Flipkart have left no stone unturned in crushing and destroying the e-commerce and retail sales market by indulging into all sorts of violations including making huge GST and Income Tax revenue loss to the Government. Their strict business module has emerged into the closure of thousands of stores in the Country in the last 3 months,” said Khandelwal.
CAIT, which has also decided to protest against the imminent visit of Amazon CEO Jeff Bezos to India on January 15, has tried meeting with the FM and the PM to further drive them to institute an inquiry into the delay of GST and Income Tax burden on both e-comm titans.