Amazon Says Report On Alleged Malpractices Not Enough For CCI Probe

Amazon India Says News Report On Alleged Malpractices Not Sufficient For CCI Probe

SUMMARY

After receiving complaints from sellers associations against ecommerce majors Amazon and Flipkart, India’s antitrust watchdog CCI had in January last year initiated a probe into both companies

In February, both companies won a temporary injunction against the probe on the grounds that CCI didn’t have sufficient material to launch an investigation

On Thursday, Amazon’s counsel Gopal Subramanium told the court Amazon did not agree with Reuters' story and CCI could not use it as evidence, as the article was published months after CCI ordered its investigation

The US-based ecommerce giant Amazon, on Thursday, told the Karnataka High Court that a Reuters report from February 2021, into the company’s alleged anti-competitive malpractices in India, was no reason to resume the Competition Commission of India’s antitrust probe into the company, which had been halted in February last year.

After receiving complaints from sellers associations against ecommerce majors Amazon and Flipkart, India’s antitrust watchdog CCI had in January last year initiated a probe into both companies. In February 2020, both companies won a temporary injunction against the probe on the grounds that CCI didn’t have sufficient material to launch an investigation. The case for lifting that injunction is being heard by the Karnataka HC.

However, last month, Amazon was hit by fresh allegations after a Reuters report detailed how it had seemingly circumvented India’s foreign direct investment (FDI) and ecommerce regulations to acquire indirect stakes into two seller entities, Cloudtail and Appario, through which it fulfils a bulk of its online orders in India.

During the court hearing last month, the CCI counsel had read parts of the Reuters report in court, also submitting clippings of the report as part of its submission to the court.

On Thursday, Amazon’s counsel Gopal Subramanium told the court the company did not agree with the Reuters story and CCI could not use it as evidence, as the article was published months after CCI ordered its investigation.

Subramanium said CCI read the Reuters article, “like gospel from top to bottom to say this merits investigation. Newspaper articles are treated as secondary hearsay, not even primary hearsay.”

Meanwhile, on Thursday, Amazon launched its four-day annual ‘Smbhav’ event where it celebrates its association with India’s small businesses and retailers. The company launched a $250 Mn Amazon Smbhav Venture Fund to invest in startups working towards the digitisation of SMBs, agriculture and healthcare.

The company also announced plans of bringing 1 Mn offline retailers and neighbourhood stores online on the ecommerce platform by 2025, as part of the ‘Local Shops on Amazon’ program.

Indian sellers associations also held a parallel event, named ‘Asmbhav’, to detail the sufferings of small sellers and retailers with large ecommerce marketplaces. They also handed out tongue-in-cheek ‘Asmbhav’ awards to outgoing Amazon chief Jeff Bezos and country head Amit Agarwal.