EU opens investigation into anti-competitive conduct of Amazon: Will it face heat in India too?

To assess US e-comm marketplace Amazon compliance with competition rule, the European Union (EU) has launched an antitrust investigation against the firm to ascertain whether it uses data of sellers to violate competition rules.

We need to ensure that large online platforms don't eliminate these benefits through anti-competitive behavior, said Commissioner Margrethe Vestager, in charge of competition policy.

The EU regulator will look into Amazon's business practices and the company's dual role as marketplace and retailer, to assess its compliance with EU competition rules.

It will also look into agreements between the US and its sellers and use of third-party seller data.

This is not a first of its kind investigation against Jeff Bezos-led firm.

Germany has also been pursuing similar charges against Amazon for the last seven months.

As per the latest report, the country has dropped the charges after Amazon agreed to correct its Business Services Agreement that applies to hundreds of thousands of merchants trading on its platform.

Amazon said the changes will take effect in a month time. It further said that the rights and responsibilities of selling partners that account for 58% of physical merchandise sales on its platform.

In both countries, third parties sellers have complained against the terms of service and being pushed by the marketplace into buying advertising and fulfillment services.

In India, the scenario for small sellers on the platform is quite similar.

All India Online Vendors Association (AIOVA), a seller lobby organization, has approached the government over Amazon's similar conduct in India.

It has appealed to the govt that there should be immediate action by the Indian government in this regard. Govt should invite sellers and take account of their issues.

In India, sellers are said to face many issues including, suspension without any explanation, product visibility issue and payments get blocked. Payments collected on sellers behalf are allegedly not kept on escrow as required by the Reserve Bank of India (RBI).

Confederation of All India Traders (CAIT) has also been for the past few months complaining about e-comm marketplaces Amazon and Walmart-backed Flipkart’s business model and alleging them of unfair trade practices.

They are also awaiting e-comm policy by the govt, which is said to bring reforms in the e-comm industry in India. The Indian govt is yet to take any action on these marketplaces on similar charges.