Amazon pumps in over Rs 1,715 Cr into India units

Daniel Fowler
January 15, 2020

The Competition Commission of India (CCI) has ordered a probe into alleged competition law violations by Amazon and Walmart-owned Flipkart over the above mentioned allegations.

India welcomed Jeff Bezos this week with an antitrust probe.

Flipkart is "fully compliant" with all laws and is now reviewing the CCI order, Senior Vice President Rajneesh Kumar said.

Following this, Amazon restructured its joint ventures to ensure compliance.

Bezos is on a trip to India during this week and is likely to meet top government functionaries, business leaders and SMBs.

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The complaint against the two companies was filed by Delhi Vyapar Mahasangh, a group representing small- and medium-sized businesses. A representative of the trade group said they want to publicise the alleged predatory pricing and other anticompetitive practices employed by Amazon and Flipkart.

"Exclusive launch (of mobile phones) coupled with preferential treatment to a few sellers and the discounting practices create an ecosystem that may lead to an appreciable adverse effect on competition", the order said. During Diwali in 2019, small trader associations claimed that they saw as much as a 60% drop in consumer good sales - mirroring the broader slowdown in the economy - whereas Amazon and Flipkart boasted about how they had racked up record revenue during the six-day festival.

The CCI probe will be the latest setback for the US companies that were past year hit with more stringent foreign investment rules.

But both companies suffered a setback a year ago when the Indian government introduced new laws that restrict foreign-owned online retailers from selling goods from their own subsidiaries.

Today, members of the Confederation of All India Traders (CAIT), a union of small traders, are set to hold a protest against Amazon in 300 cities, alleging the company of flouting the country's Foreign Direct Investment (FDI) rules. Amazon has previously invested about $5.5 billion in India.

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