India is the second-largest internet market in the world and a large market for many global powerhouses, especially US behemoths like Amazon, Flipkart, Apple, and others. But recently, these companies have been going through a tough time in India as the country has been doubling down on them, mostly because of how they abuse their dominance in the market to stifle competition and reap profits.
The most recent development came at the virtual event organized by the Stanford India Policy and Economics Club where Commerce and Industry Minister Piyush Goyal accused US e-commerce giants like Amazon and Walmart of arrogance and blatantly flouting the laws of the land as they engage in predatory pricing practices.
Goyal said that the e-commerce firms should not leverage their strong position in the market to hurt Indian interests and should follow the law of the land. According to him, the companies used their scale and access to large pools of low-cost capital to indulge in predatory pricing practices “to the detriment of mom-and-pop stores,” hurting domestic interests or domestic consumer interests. Such stores are mostly offline and are unable to keep up with the powerhouses.
“I’ve had several engagements with these large companies, particularly the American ones, and I can see a little bit of arrogance,” he said.
While Goyal did not name any of the companies he accused, nor which laws had been flouted, one can certainly take a guess. His comments come soon after the Centre had passed a set of regulations that would restrict Amazon and Walmart’s Flipkart in doing business in India, including the ban of flash sales and mandating the appointment of a Chief Compliance Officer. Recently, the Karnataka High Court gave the green light to the Competition Commission of India (CCI) in conducting an investigation into whether Flipkart and Amazon indulged in anti-competitive business practices. The HC’s ruling was challenged by both e-commerce giants who denied all allegations of circumventing India’s laws leveled against them by Indian traders and retailers.
“To my mind, if they have nothing to hide, if they are doing honest business practices, why don’t they respond to the CCI?” Goyal said.