Online Sellers File another Anti Trust Case against Amazon over Deep Discounts

All India Vendors Association alleges deep rooted foul play

More than 2,000 online sellers of Amazon have filed an antitrust case in the Competition Commission of India (CCI) against Amazon in India. It been alleged that the company has acted in a biased manner towards some retailers like Cloudtail, Amazon Retail, Amazon Wholesale, etc. by favouring them due to their online discounts. The case has been filed by All India Online Vendors Association (AIOVA), a group of online sellers, and it has stated that this preferential company drives the independent vendors out of business and restrict the entry of new players.

Further, the group alleges that Amazon India's wholesale arm buys goods in bulk from manufacturers and then sells them to sellers such as Cloudtail. Such sellers then offer goods on Amazon.in at big discounts. "This anti-competitive arrangement ... is causing foreclosure of competition by driving independent sellers out of the market," the group alleged in its filing at CCI, as reported by Reuters. This case filing at the CCI includes screenshots of product listings on Amazon's website that show some products, including groceries and detergents, having discounts between 8% to 45% compared with retail prices visible on the website. 

The seller group also argues that Amazon charges lower fees to selected sellers and this effectively makes it difficult for independent online retailers to compete on its website. Cloudtail, one of Amazon's biggest Indian sellers, pays a fee to Amazon of 6.3% for electronic products whereas independent sellers pay approximately 28.1%, the group alleged in its filing. A Cloudtail spokeswoman said that it was in "compliance with all applicable laws in its operations”.

Small sellers claim Amazon uses complex business structures to bypass restrictions

Indian regulations permit companies like Amazon to operate an e-commerce marketplace where sellers can list goods for a fee. However, India tightened such regulations last year to prevent steep discounts, but small sellers still claim that Amazon uses complex business structures to bypass restrictions, an allegation the company denies.

Amazon’s troubles over allegations of deep discounting continue

This complaint presents a new regulatory hurdle for Amazon in India, where it has committed an invested of USD 6.5 billion. In January of this year, the CCI had ordered an investigation of Amazon and rival Flipkart, owned by Walmart over alleged violations of competition law and certain discounting practices. This case has been on-going and is being challenged by Amazon.

Amazon assures equal treatment to all online sellers

The company has previously said that it complies with all Indian laws and treats all sellers equally on its platform. Furthermore, Amazon has said that it provides an e-commerce platform in India where more than 650,000 sellers are engaged who make their own pricing decisions while listing goods.

All eyes on Competition Commission of India now

Unlike Indian cases filed in the Courts, filings and details of cases in the CCI are not made public unless there is a decision of the case by the commission. The CCI is expected to review the case in the coming weeks and can either order an investigation into the allegations or dismiss the allegations.