A gaggle of greater than 2,000 on-line sellers has filed an antitrust case towards Amazon in India, alleging the US firm favours some retailers whose on-line reductions drive unbiased distributors out of enterprise, an authorized submitting seen by Reuters confirmed.
The case presents a brand new regulatory problem for Amazon in India, the place it has dedicated $6.5 billion in funding however is battling a fancy regulatory setting.
In January, the Competitors Fee of India (CCI) had ordered an investigation of Amazon and rival Flipkart, owned by Walmart , over alleged violations of competitors legislation and sure discounting practices, which Amazon is difficult, in line with court docket filings.
Within the newest case, the All India On-line Distributors Affiliation, members of which promote items on Amazon and Flipkart, allege Amazon engages in unfair enterprise practices.
The group alleges that Amazon India’s wholesale arm buys items in bulk from producers and sells them at a loss to sellers corresponding to Cloudtail. Such sellers then provide items on Amazon.in at massive reductions.
“This anti-competitive association … is inflicting foreclosures of competitors by driving unbiased sellers out of the market,” the group alleged in its Aug. 10 submitting at CCI, seen by Reuters.
Amazon didn’t reply to a request for remark. It has beforehand stated it complies with all Indian legal guidelines and treats all sellers equally on its platform.
A Cloudtail spokeswoman stated it was in “compliance with all relevant legal guidelines in its operations.”
Not like Indian court docket instances, filings and particulars of instances reviewed by the CCI aren’t made public. Within the coming weeks, the CCI will assessment the case and will resolve to launch a wider investigation or dismiss it. The CCI didn’t reply to a request for remark.
Chanakya Basa, a lawyer for the sellers group, confirmed the case submitting with the CCI however declined to elaborate.
India’s rules enable Amazon to function an e-commerce market the place sellers can listing items for a price.
India tightened rules final yr to discourage steep reductions, however, small sellers nonetheless say Amazon makes use of complicated enterprise constructions to bypass restrictions, an allegation the corporate denies.
The newest case submitting, working to greater than 700 pages, contains screenshots of product listings on Amazon’s web site that confirmed some merchandise, together with groceries and detergents, discounted by between 8% to 45% in contrast with retail costs seen on the e-commerce web site.
The vendor group additionally alleges that Amazon costs decrease charges to chose sellers, which successfully makes it tough for unbiased on-line retailers to compete on its web site.
Cloudtail, one in all Amazon’s greatest India sellers, pays a price to Amazon of 6.3% for digital merchandise, whereas unbiased sellers pay roughly 28.1%, the group alleged in its submitting.
Amazon has stated it helps to offer an e-commerce platform in India to greater than 650,000 sellers who make their very own pricing choices whereas itemizing items.