SUMMARY
The Confederation Of All India Traders in its letter to the PM Narendra Modi wrote that it has been requesting various government offices and investigating agencies to investigate and penalise Amazon, yet the pleas have fallen on deaf ears
Reportedly, alleging Amazon of corruption charges, a whistleblower claimed that the tech giant spent INR 8,546 Cr on legal expenses between 2018 and 2020
In response to the reports, the ecommerce major wrote to the Union Commerce Minister Piyush Goyal on 28th September clarifying the matter of legal fees
Inc42 Daily Brief
Stay Ahead With Daily News & Analysis on India’s Tech & Startup Economy
As the fight between Indian ecommerce market stakeholders and US-based ecommerce giant Amazon heats up, in yet another communication, this time to Prime Minister Narendra Modi, the Confederation of All India Traders (CAIT) has alleged irregularities and violations to laws by Amazon, while seeking an immediate investigation into alleged misuse of legal professional charges.
CAIT, currently on a “Halla Bol” campaign against ecommerce giants such as Amazon and Flipkart, previously wrote to the Competition Commission of India (CCI), demanding immediate steps for aggressive investigation into the business model of Amazon (as well as Flipkart).
With reports claiming that Amazon spent a staggering INR 8,546 Cr on legal expenses between 2018 and 2020, CAIT claims to have written to several other government bodies seeking probe into the matter — which have fallen on deaf ears.
In the letter to the PM, CAIT’s National Secretary General Praveen Khandelwal wrote, “In the backdrop of the long pending investigations into their blatant violations of FDI policy/FEMA and their anti-competitive practices, such astronomical expenses in the name of Legal Professional charges assumes significance and needs and urgent investigation under the Prevention of Corruption Act (PCA) and Prevention of Money Laundering Act (PMLA) and other laws of India.”
Khandelwal added that law enforcement and investigating agencies must step into the matter immediately and must penalise Amazon for its blatant violations. Khandelwal also suggested the suspension of Amazon’s operations in India amid the pending investigation.
Under Government Radar
In September, reports surfaced about a whistleblower making allegations of corruption against Amazon. Post the reports on alleged bribery and exorbitant legal fees, the US-based ecommerce major wrote to the Union Commerce Minister Piyush Goyal on 28th September clarifying on the matter of legal fees. The letter asserted that the company’s actual legal expenses amounted to INR 52 Cr, and not INR 8,546 Cr, as claimed in media reports.
It also claimed that media outlets have incorrectly assumed Amazon India Limited to be a part of Amazon and have erroneously attributed the legal expenses of that company to the ecommerce giant.
Amazon has been facing a lot of flak off late. ‘Panchjanya’, a weekly associated with the Rashtriya Swayamsevak Sangh (RSS) has labelled it as ‘East India Company 2.0’. Panchjanya carried a cover story on Amazon, alleging that the ecommerce giant has “paid large sums of money as bribes to government officials to tweak government policies for its own benefits”.
Since September 2021, post-Supreme Court nod to the CCI, Amazon, along with its competitor Flipkart are also facing an investigation over alleged anti-competitive practices.
CAIT’s letter to the Prime Minister comes at a time when both Amazon and Flipkart are hosting festival sales providing discounts and offers to the consumers, which the traders’ body has been opposing for the past few years alleging deep discounts and anti-competitive actions.
Khandelwal also alleged that the festive sale is “the living example of gross violation” of stipulations of FDI policy of the government.
Note: We at Inc42 take our ethics very seriously. More information about it can be found here.