NEW DELHI, April 28 (Reuters) – India’s antitrust body launched early Thursday raids on two leading domestic sellers of online retail giant Amazon.com Inc (AMZN.O) and some on Walmart’s (WMT.N) flipchart after allegations of infringement of competition law, sources told Reuters.
Indian retailers, key supporters of Prime Minister Narendra Modi, have long argued that Amazon and Flipkart’s platforms benefit a few big sellers through predatory pricing, even though companies say they comply with all Indian laws.
The two Amazon sellers featured in Thursday’s raids were Cloudtail and Appario, two sources said on condition of anonymity as the details were not public.
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Two other sources said some vendors on Walmart’s Flipkart platform were also assaulted by officials from the Indian Competition Commission (CCI), but there were no immediate details.
“This is a significant development, as CCI generally does not conduct searches in non-cartel cases,” a former competition regulator told Reuters.
“Performing dawn raids to uncover complex economic activities is a new domain for the regulator.”
Amazon, which has an indirect shareholding in both of the sellers that were attacked, did not immediately respond to a request for comment, and neither did Flipkart.
Cloudtail, Appario, and the regulator also did not immediately respond to email inquiries.
One source said the raids, carried out in the capital New Delhi and the southern technology hub of Bengaluru, were related to a study commissioned by the CCI in January 2020.
In that case, Amazon and rival Flipkart face accusations of anti-competitive practices, such as promoting favorite sellers on websites and prioritizing lists from some sellers. The antitrust investigation continues.
Amazon has previously said that it “does not give preferential treatment to any sellers in its marketplace,” and “treats all sellers in a fair, transparent and non-discriminatory manner”.
A Reuters survey last year, based on Amazon’s internal documents, showed that it had given preferential treatment for years to a small group of sellers on its platform, including Cloudtail, and used them to circumvent Indian laws. (https://reut.rs/3rTWXxi)
It showed that Amazon had for years helped these sellers with reduced fees, among other benefits, as well as helped Cloudtail enter into special agreements with major technology companies.
The survey showed that around 35 of Amazon’s more than 400,000 sellers in India in 2019 accounted for about two thirds of sales on their India website. Of that number, two vendors, Cloudtail and Appario, contributed 35% of the platform’s sales.
The antitrust body told a court that the Reuters report confirmed evidence it had received against Amazon.
In August, Amazon and Cloudtail decided that the latter would cease to be a seller from May 2022. read more
(This story is restored to correct paragraph 3 spelling of “var”)
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Reporting by Aditya Kalra in New Delhi; Editing Clarence Fernandez
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