Amazon India must have had anticipated nationwide protests from industry bodies like the Confederation of All India Traders (CAIT) as Jeff Bezos arrives in India for a three-day visit but the sudden probe by the Competition Commission of India (CCI) over deep discounting and preferential listings on both Amazon and Flipkart has come as a surprise for the eCommerce giant.
According to The New York Times, “instead of garlands, India’s supervision is welcoming him (Bezos) with a new antitrust case”.
The CCI inquiry, prompted by the association of small traders, is particularly related to the online sales of mobile phones. The case was filed by Delhi Vyapar Mahasangh as the informant versus Flipkart Internet, owned by Walmart and Amazon Sellers, as opposite parties.
The All India Online Vendors Association (AIOVA) has also filed a petition with the CCI, alleging that Amazon India favors merchants that are its subsidiaries, such as Cloudtail and Appario.
The CCI probe is something Amazon must be worried about as Indian regulators are finally ‘evolving’, taking stern action against multinationals like Google in the recent past.
According to Prabhu Ram, Head, Industry Intelligence Group (IIG), CMR, the CCI’s move to initiate an anti-trust probe against Amazon and Flipkart marks a significant shift in how it views digital commerce in India.
“The move follows from its seven-month-long market study that CCI undertook, that recommended ‘greater transparency’ and ‘self-regulation’ by the market players. It remains to be seen what changed for CCI to initiate the probe. All said, this is still a work-in-progress, with the last word yet to be spoken,” Ram told IANS.
In an 11-page order, the CCI observed that the exclusive arrangements between smartphone/mobile phone brands and e-commerce platform/select sellers selling exclusively on either of the platforms, coupled with the allegation of linkages between these preferred sellers and e-commerce companies “merits an investigation”.
Amazon said in a statement that “We welcome the opportunity to address allegations made about Amazon; we are confident in our compliance and will cooperate fully with CCI while Flipkart said it takes pride in democratizing e-commerce in India”.
On the other side, thousands of traders are ready to hold ‘Halla Bol’ protest demonstrations in about 300 cities in different states all over the country on January 15 when Bezos begins his visit.
CAIT Secretary General Praveen Khandelwal plans to organize peaceful rallies against Bezos in major cities with at least 100,000 traders participating in the protests.
He said that the visit of Bezos to India is to build a wrong and false narrative that Amazon is empowering small traders through its e-commerce portal.
According to the traders’ body, discounts on online platforms such as Amazon and Flipkart are predatory in nature and the government should ensure price parity in online and offline markets.
The Indian government aims to solve this with the new eCommerce policy that also is allegedly being flouted by the behemoths, says CAIT.
“The new e-commerce policy would potentially benefit small and bespoke e-commerce players, who could benefit from the level-playing field that the policy aims to provide,” said Ram.