CCI raids Amazon, Flipkart seller offices; CAIT welcomes the move

Traders’ body, Confederation of All India Traders (CAIT) has welcomed the ongoing raids by the Competition Commission of India (CCI) at some of the top seller offices of Amazon India and Flipkart.  
 
Praveen Khandelwal, General Secretary, CAIT said in a statement that it is a welcome step of CCI which will surely vindicate various complaints made by the CAIT against Amazon and Flipkart.
 
The development was first reported by Reuters. Meanwhile sources privy to the development confirmed with Business Today that the competition watchdog has indeed raided a few seller offices of Amazon, Flipkart in Delhi and Bengaluru.
   
The raids are taking place even as Cloudtail India, which drives nearly 80 per cent of Amazon’s sales and was recently acquired by the e-tailer is in the process of shutting down , shifting its inventories to other seller firms whereas its 1000 odd employees have transitioned to Amazon.  
 
“Amazon has been moving in this direction (acquisition of Cloudtail) mainly to subscribe to India’s e-commerce, FDI rules and is therefore shutting down Cloudtail,” a source said.
 
BT’s queries sent to Amazon and Flipkart remained unanswered. Sources said that the ongoing raids pertain to an investigation which was launched by CCI in January 2020, when CAIT’s affiliate, Delhi Vyapar Manch alleging significant violations by the e-commerce companies under the various sections of the Competition Act.
 
“The seizure of records will amply substantiate the charges made by CAIT against Amazon and Appario. Beside, these two sellers, other top 20 sellers of Amazon in last five years, should also be properly scanned since Amazon is flouting all laws and FDI policy of the Government and trying to creating a monopolistic market in India since a long time and there is no transparency on Amazon e-commerce portal thereby causing huge damage to small retailers of the Country and collateral damage to the consumers,” CAIT said in a statement.
 
The antitrust watchdog had said that it will also investigate the allegations that the online marketplaces may also be selling through entities which are in reality their own subsidiaries and may be connected through common investors, directors, shareholders etc.
 
“It needs to be investigated whether the alleged exclusive arrangements, deep-discounting and preferential listing by the OPs are being used as an exclusionary tactic to foreclose competition and are resulting in an appreciable adverse effect on competition contravening the provisions of Section 3 (1) read with Section 3(4) of the Act,” the CCI had said while ordering the investigation.