Online sellers body approaches CCI over alleged deep discounting by Amazon India

Online sellers body approaches CCI over alleged deep discounting by Amazon India
27 Aug, 2020

All India Online Vendors Association (AIOVA) has filed a complaint with Competition Commission of India (CCI) alleging violation of Competition Act by Amazon Seller Services, the India unit of the Washington, Seattle headquartered ecommerce giant.

AIOVA, a lobby body, claims to represent over 2,000 sellers who trade across multiple ecommerce platforms.

The complaint, dated August 10, states that Amazon in India violated Section 3 of Competition Act 2002. The complaint stated that the business to business (B2B) arm of Amazon, Amazon Wholesale India, buys goods in bulk from manufacturers which are sold at a huge discount by Amazon India Retail and Cloudtail, one of the largest sellers on the Amazon India marketplace.

The complaint alleges that the deep discounts coupled with lack of platform neutrality have adversely affected other sellers, violating the Competition Act.

Cloudtail is a joint venture between Infosys co-founder Narayan Murthy’s Catamaran Ventures and Amazon through Prione Business Services.  It changed its shareholding structure after the government issued Press Note 2 in December 2018 prohibited step-down subsidiaries with equity investments from the marketplace to sell on the platform.

Amazon reduced its shareholding in the company from 49% to 24% in keeping with the norms laid down by the Department for Promotion of Industry and Internal Trade (DPIIT).

AIOVA has sought a ban on Amazon Wholesale and Prione Business Services from selling on Amazon India until further orders from the CCI. The competition watchdog is yet to issue orders on the complaint.

There is also an ongoing CCI investigation into the operations of Amazon and its local rival, Walmart backed Flipkart, on a complaint filed by Delhi Vyapar Mahasangh. The complaint alleges that the platforms hold deep discounting and exclusive arrangement with brands for the launch of products. The investigation was stayed by the Karnataka High Court in February.

CCI is also investigating allegations of deep discounting and preferential selling against Flipkart based on a complaint filed by AIOVA in 2018.