Online marketplace Amazon now has a new hurdle in the country, with the All India Online Vendors Association (AIOVA) filing a complaint with the Competition Commission of India accusing it of anti-competitive practices.
First reported by Reuters, the sellers body reportedly said that Amazon engages in unfair business practices, and that it buys goods in bulk and sells it to affiliated seller Cloudtail at a loss. Cloudtail is Amazon’s largest seller. Such sellers then offer goods at a discount, the complaint reportedly says. AIOVA has alleged that Amazon’s business practices are in violation of Section 3 of the Competition Act.
“The anti-competitive arrangement (wholesale units selling to Cloudtail and then listing them at a discount)...is causing foreclosure of competition by driving independent sellers out of the market, resulting in an appreciable adverse effect to competition in India,” the group said in its filing, according to the Economic Times.
The complaint reportedly says that Amazon has deep discounting, offers preferential treatment to its sellers and uses third-party seller data for its own labels and that Cloudtail pays Amazon a 6.3% fee for electronic products, as opposed to 28.1% that independent sellers pay.
CNBCTV18 reported AIOVA has named Amazon Seller Services, Amazon Wholesale India, Amazon Retail India, Cloudtail and another seller, Prione, in its complaint.
"Amazon.in is a pure 3P marketplace. Sellers on Amazon.in have the absolute discretion to decide what products to sell and their prices. Amazon is compliant to all relevant laws of the land and operates the marketplace with high degree of transparency and uniformity," Amazon said in a statement.
The CCI has admitted the complaint and will look at the case against Amazon before deciding on next steps.
Amazon was earlier facing allegations of violating the Competition Act based on a complaint filed by the Delhi Vyapar Mahasangh. In February, the Karnataka High Court granted an interim stay on the probe ordered by CCI into the practices of e-commerce players over allegations of deep discounting and predatory pricing.
Recently, as part of the antitrust hearings in the US Congress, when asked if Amazon accesses and uses seller data when making business decisions, Amazon CEO Jeff Bezos said that the practice is banned, but he cannot guarantee that the policy had never been violated.
“We continue to look into that very carefully. I’m not yet satisfied that we’ve gotten to the bottom of it, and we’re going to keep looking at it,” he said.
