According to two sources with firsthand knowledge of the situation, India’s antitrust regulator started raids on two big local sellers of online retail giant Amazon.com Inc on Thursday, accusing them of violating competition regulations.
Indian retailers, who make up a substantial portion of Prime Minister Narendra Modi’s base of support, have long said that Amazon’s platform helps only a few large sellers, and that the company engages in predatory pricing that hurts local businesses.
The company claims to follow all Indian laws.
The nature of the alleged infractions that prompted the raids on Thursday was not immediately known. Cloudtail and Appario were the two sellers, according to the individuals, who spoke on the condition of anonymity since the information were not made public.
A request for comment from Amazon, which has an indirect equity investment in both, was not immediately returned. Cloudtail, Appario, and the Competition Commission of India (CCI) did not respond to emailed requests for comment.
According to one source, the raids in New Delhi, the capital, and Bengaluru, the southern IT hub, were related to a CCI inquiry ordered in January 2020.
In that lawsuit, Amazon and Walmart’s Flipkart have been accused of anti-competitive activities such as promoting preferred merchants on their platforms and prioritising listings from certain sellers.
The corporations deny the charges, and the antitrust probe is still ongoing.
Amazon has previously stated that it ‘does not give any seller on its marketplace preferential treatment,’ and that it ‘treats all sellers in a fair, equitable manner.’ transparent, and non-discriminatory ‘.
Last year, a Reuters investigation based on Amazon records revealed that the company had granted a tiny group of vendors, including Cloudtail, special treatment for years and exploited them to circumvent Indian rules. (https://reut.rs/3rTWXxi)
According to the article, Amazon has been helping a limited number of vendors succeed on its platform for years, offering cheaper fees and assisting Cloudtail in striking special partnerships with huge tech corporations.
The antitrust agency told a judge that the Reuters report backed up information it had received against Amazon.
Amazon and Cloudtail agreed in August that the latter would stop selling in May 2022.