An online sellers association representing over 2000 sellers across e-commerce platforms has approached the Competition Commission of India with an antitrust complaint against Amazon for favouring select sellers on its platform.
The All India Online Vendors Association or AIOVA has named Amazon Sellers Services Pvt Ltd, Amazon Wholesale India Private Ltd, Amazon Retail India Private Ltd, Cloudtail India Private Ltd, and Prione Business Services Private Ltd in its filing.
For the unaware, Amazon Sellers Services operates the e-commerce marketplace in India while Amazon Wholesale India is a B2B unit and Amazon Retail is Amazon’s fully owned food retailing subsidiary in India. Cloudtail is the largest seller on Amazon, which is a 100% owned subsidiary of Prione Business Services, a joint venture of Infosys co-founder Narayana Murthy’s Catamaran Ventures and Amazon Asia.
According to the document dated August 10 and seen by Entrackr, AIOVA said: “This anti-competitive arrangement is causing foreclosure of competition by driving independent sellers out of the market.”
Reuters had first reported the development.
The sellers’ body further alleged that Amazon Wholesale buys goods worth hundreds of crores in bulk quantities at a lesser price from the manufacturers and further sells at a loss to its own seller Amazon Retail and Cloudtail India. These sellers further sell it on their own marketplace Amazon.in at a massive discount to consumers.
On the other hand, most sellers selling similar categories of goods like Amazon Retail and Cloudtail India, are unable to sell at a loss price as no investor is willing to invest in a loss-making business.
Deep discounts and lack of platform neutrality on the marketplace is driving existing competitors out of its marketplace and creating barriers to new entrants in the marketplace resulting in the foreclosure of competition, said AIOVA in the complaint.
Responding to Entrackr’s query on the matter, an Amazon spokesperson said, “Amazon.in is a pure 3P marketplace. Sellers on Amazon.in have the absolute discretion to decide what products to sell and their prices. Amazon is compliant with all relevant laws of the land and operates the marketplace with a high degree of transparency and uniformity.”
As per AIOVA, Amazon has been exploiting this adversity by facilitating sales of essential commodities sold by its own sellers by disallowing other players. Further, the filing mentioned that the e-commerce firm charges lower fees to selected sellers. For instance, Cloudtail pays a fee of 6.3% for electronic products, while independent sellers have to pay around 28.1%.
In an email statement, Cloudtail said it was in “compliance with all applicable laws in its operations. Entrackr queries sent to CCI didn’t elicit any immediate response. We will update the post as and when they respond.
In the past couple of years, sellers and traders’ bodies have repeatedly raised concerns over malpractices by e-commerce marketplaces. While the latest case filed by AIOVA raises serious allegations on Amazon, CCI’s decision on the matter will make it more clear for sellers.
