News Roundup: Amazon India Faces Delivery Worker Strike; Suspends Sellers & More

This week, trouble went knocking at Amazon’s doors, again! The company’s India representatives were summoned to a meeting with the Department for Promotion of Industry and Internal Trade (DPIIT) for discussing India’s foreign direct investment (FDI) policy. 

To be sure, representatives from several other ecommerce companies such as Reliance Retail, Snapdeal, Tata Cliq, Paytm Mall, Swiggy, Zomato, Urban Ladder (acquired by Reliance), Pepperfry, Urban Company, Grofers, BigBasket and Shopclues (acquired by Singapore-based Qoo10) were present at the meeting. 

But then again, given the recent Reuters report about Amazon circumventing India’s FDI regulations, the matter did come up at the meeting with DPIIT too. Amazon reiterated that it does not give preferential treatment to any sellers on the marketplace and “treats all sellers in a fair, transparent and non-discriminatory manner”. 

On India mulling changes to its FDI policy to curb malpractices in the ecommerce sector, Amazon told DPIIT that it would be premature for the government to make any policy changes until the ED has completed its investigation. The company also reiterated that it complies with all Indian laws. 

Amazon said any policy change would impact its current investments, leading to a dent in global investors’ confidence in India as a market. Amazon has also reportedly highlighted that the policy changes would have “devastating consequences” on suppliers and small businesses. Even Flipkart called for policy stability during the meeting.

This week, Amazon also suspended the seller accounts of nearly 2,000 Indian sellers on its platform, of which, a large proportion were SMEs with working capital constraints. The account suspension allegedly wiped out the monthly revenue of these sellers, who typically see INR 1 Lakh – INR 2 lakh in daily sales.

While Amazon has alleged that these sellers violated the company’s code of conduct for sellers and engaged in malpractices, sellers have denied any wrongdoing. 

Amazon Workers On Strike

During this week, a clutch of Amazon India delivery workers also went on a 24-hour planned strike across several of the company’s warehouses in cities such as Bengaluru, Delhi, Hyderabad and Pune. The delivery workers are demanding an increase in payout per delivery and insurance benefits. 

According to the Indian Federation of App-Based Transport Workers (IFAT), Amazon issued a new policy update on March 15, 2021, saying that the delivery staff would earn INR 10 on delivering small packages and INR 15 for deliveries made through tempos. The staff was earlier getting INR 35 on each order, the trade union said.

IFAT said in a press note released on Wednesday that delivery staff of Amazon were making around INR 20,000 a month before the national lockdown last year, but that earning has now dropped to INR 10,000 following updated payment structures.

Other News 

• The Atmanirbhar Digital India Foundation (ADIF), an association of Indian tech startups, is planning to approach the Competition Commission of India (CCI) to appeal against Google’s proposed 15% levy from app-makers on in-app purchases of digital goods on its Play Store. The association has also written to the IT ministry seeking its intervention in the matter.
• The government of India claims it has found a way around preserving end-to-end encryption in WhatsApp chats, while also enabling traceability of the messages to the origin.
• The Supreme Court of India on Tuesday (March 23) stayed proceedings of cases seeking regulation of content on over-the-top (OTT) platforms, including Netflix, Amazon Prime Video and Disney+ Hotstar and others. Multiple petitions on the matter are being heard in high courts of Punjab and Haryana, Madhya Pradesh and Allahabad.
• The Indian government’s Department for Promotion of Industry and Internal Trade (DPIIT) on Thursday (March 25) met executives from a dozen ecommerce companies to address the violation of the FDI policy. The development comes as the government is contemplating to amend the FDI policy and issue an ecommerce policy for the online commerce segment to create a level playing field for small retailers.
• Tata Group’s retail payment entity Tata Sons is reportedly working on a mobile phone-based universal point of sale (PoS) system that could replace all thumbprint-powered transactions like the Aadhaar-enabled Payment System (AePS) in India. The payment system will be interoperable across all payment operators in the country.

Stay tuned for next week’s News Roundup!