Amazon accused of manipulation, furious traders call for ban
Internal documents accessed by foreign news agency claim that Amazon gave preferential treatment to a small group of sellers on its India platform and used them to circumvent the foreign investment rules.
E-commerce giant Amazon today finds itself in a spot of bother after reports emerged that the company may have tried to evade scrutiny in India by allegedly misrepresenting its ties with the sellers.
Internal documents accessed by news agency Reuters claim that Amazon gave preferential treatment to a small group of sellers on its India platform and used them to circumvent the foreign investment rules.
The documents also reportedly claim that Amazon has been recalibrating its corporate structures every time the government imposed new restrictions aimed at protecting small traders.
Some of the other alleged revelations made citing the leaked documents include:
* Amazon preferred 35 vendors, who constituted two-thirds of its online sales. The 35 vendors included two where Amazon had indirect stakes -- Cloudtail and Appario.
* Amazon helped a small number of sellers prosper and gave them discounted fees, using them to bypass India's regulatory restrictions on foreign investment aimed at protecting small traders.
* Amazon exercised major control over vendor inventory in India even though it claimed that sellers operate independently on its platform.
* Amazon's executives perceived Prime Minister Narendra Modi as someone for whom strong administration and governance were the keys to running a successful government. They, however, did not see him as an intellectual or an academic."
Claiming that the allegations were unsubstantiated, incomplete and factually incorrect, the e-commerce giants said that the company made the necessary changes to comply with the government policy updates.
Reiterating that it has always complied with Indian laws and policies, Amazon said in a statement that it has never given any preferential treatment to any seller on its marketplace."
However, no everyone is convinced of Amazon's clarification. In fact, some today feel vindicated.
Largest traders' body in the country, the Confederation of All India Traders has sought a ban on the e-commerce platform.
The CAIT, in a statement, said that for years it had maintained that Amazon was circumventing FDI laws of India to conduct unfair and unethical trade.
The CAIT said that its own investigation had allegedly found that only 35 companies were responsible for up to 85 per cent of all sales on the e-commerce site's platform.
Demanding serious action against Amazon, the traders' body said it intends to launch a nationwide agitation against e-commerce giants for cheating both small retailers and consumers in this country.
The Centre too apparently has taken note of the allegations against Amazon.
Commerce and Industry Minister Piyush Goyal today said that e-commerce is supposed to provide an agnostic platform so that buyers and sellers can trade with each other, the platform should not become part of the trading transaction.
He further said that e-commerce platforms should neither have algorithms which give preference to one or the other or promote their own products but provide all data that is required for a rational choice, and the choice should be a free choice of the consumer.