The Confederation of All India Traders (CAIT) urged the central government to ban the local operations of Amazon, the US e-commerce giant, after a report surfaced that Jeff Bezos’ company has, for years, given preferential treatment to a small group of sellers on its India platform, publicly misrepresented its ties with the sellers and used them to circumvent increasingly tough foreign investment rules that affect e-commerce.
The documents, dated between 2012 and 2019, provide an inside look for the first time into how Amazon adjusted its corporate structures each time the government imposed new restrictions aimed at protecting small traders. The CAIT, which claims to represent over 80 million retail stores in the country, said that “the shocking revelations” in the Reuters story (which brought the matter to light) were “sufficient enough to immediately ban operations of Amazon in India.”
Amazon is already in a deep hole of its own making and is facing increased scrutiny by regulators. This news could have serious repercussions in one of its largest markets. The CAIT alleged that Amazon benefits a few big sellers and that the e-commerce giant engages in predatory pricing that harms their own businesses. They called upon commerce minister Piyush Goyal to “take immediate note of this important and burning issue and order for a ban on operations of Amazon in India.”
Praveen Khandelwal, secretary-general of CAIT, said, “It’s an open and shut case that Amazon is willfully playing with rules. What more we are waiting for. It should be banned in India with immediate effect.” The CAIT maintained its stand that the Reuters report vindicated the stands and arguments it had made in recent years and that the CAIT would raise this issue “in a big way.”
In reply, Amazon said that it has always complied with Indian law and that “as government policies have continued to evolve, we have consistently made the necessary changes to ensure compliance at all times.” It refused that it gave preferential treatment to any seller and claims that it treated all sellers in a fair, transparent, and non-discriminatory manner, with each seller responsible for independently determining prices and managing their inventory.”
On its Twitter account, Amazon criticized the Reuters report as “unsubstantiated, incomplete, and factually incorrect,” saying, “In last several years, there has been (a) number of changes in regulations; Amazon has on each occasion taken rapid action to ensure compliance. The story, therefore, seems to have outdated information and doesn’t show any non-compliance.”
The documents revealed that Amazon had helped a small number of Indian sellers prosper, gave discounted fees, and used them to bypass India’s regulatory restrictions on foreign investment aimed at protecting small traders. They also revealed that the e-commerce giant disregarded the government’s laws that no e-commerce platform should exercise ownership over sellers’ inventory.
