Over 2,000 online retailers and sellers have filed suit in an antitrust case against Amazon India, claiming the American corporation picks specific retailers whose lower discounted pricing forces independent vendors out of business.
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The case creates a new regulatory challenge for Amazon’s business flex and capabilities in India, where it has invested $6.5 billion, yet faces a complex regulatory environment. This past year, the Competition Commission of India requested an inquiry and investigation into Amazon and rival Flipkart, owned by Walmart, about violations of competition law and discounting practices, which Amazon has challenged already.
All India Online Vendors Association, members that sell goods on Amazon, claim Amazon engages in unfair practices when doing business. The group believes that Amazon India’s wholesale purchases manufactured goods in bulk, and then sells them at a loss to separate sellers. Such sellers then offer the same goods on Amazon at a discount.
Amazon said it complies with all laws and its India website is a third-party market where sellers can decide pricing. Amazon’s statement also verified that wholesale units allow businesses to buy products and anyone can register on it. India has regulations allowing Amazon to operate e-commerce marketplaces where sellers can list goods for a small fee. India had tightened regulations last year to deter steep discounts, but sellers still say Amazon uses complex business platforms to bypass restrictions.
The sellers believe that Amazon is charging lower fees to selected sellers, which effectively makes it difficult for independent online retailers to compete on its website. Cloudtail, one of Amazon’s biggest Indian sellers, pays a fee to Amazon of 6.3% for electronic products, compared to independent sellers who pay roughly 28.1%.
The most recent filing, includedAmazon’s website that presented products, including groceries and detergents, discounted from 8% to 45% compared to the retail price.
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Source: https://www.reuters.com/article/us-amazon-com-india-exclusive/exclusive-amazon-faces-new-antitrust-challenge-from-indian-online-sellers-legal-documents-show-idUSKBN25M193
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