A group of more than 2,000 online sellers has filed an antitrust lawsuit against Amazon in India, alleging the US company favors some retailers whose online discounts lead independent vendors out of business, according to a legal file seen by Reuters.
Ecommerce news India - The case presents a new regulatory challenge for Amazon in India, which has committed $ 6.5 billion in investments but is battling a complex regulatory environment.
In January, the Competition Commission of India (CCI) ordered an investigation of Amazon and its Walmart-owned rival Flipkart for alleged violations of competition law and certain adverse practices, which Amazon is challenging, according to court records as per Ecommerce news India.
In the latest case, the All India Online Vendors Association, whose members sell products on Amazon and Flipkart, alleges that Amazon engages in unfair business practices. Reuters was the first to report the case file on Wednesday.
The group claims that the wholesale arm of Amazon India buys products in bulk from manufacturers and sells them at a loss to sellers such as Cloudtail. So these sellers offer goods on Amazon.in at big discounts.
"This anti-competitive arrangement ... blocks competition by pushing independent sellers out of the market," the group said in its CCI file on Aug. 10 - Ecommerce news India
Amazon said in a statement that it complies with all laws and that its website in India is a purely third-party marketplace where sellers have the discretion to set product prices. Amazon's statement also said that its wholesale unit allows businesses to purchase products and anyone can sign up for them.
A Cloudtail spokeswoman said it "compliance with all applicable laws in its operations."
Unlike the Indian court cases, the filings and details of the cases examined by the ICC are not made public. In the coming weeks, the CCI will review the case and may decide to initiate or dismiss a more extensive investigation.
The ICC did not respond to a request for comment.
Chanakya Basa, a lawyer for the seller's group, confirmed that the case had been raised to the CCI, but declined to elaborate.
As per Ecommerce news India, India Indian regulations allow Amazon to operate an e-commerce marketplace where sellers can list goods for a fee.
India tightened regulations last year to deter big discounts, but small sellers still say Amazon uses complex business structures to bypass restrictions, an allegation the company denies.
The most recent record, of more than 700 pages, includes screenshots of product listings on Amazon that showed some products, including groceries and detergents, between 8% and 45% lower than the retail prices shown in the e-commerce website.
The seller group also claims that Amazon charges lower fees to selected sellers, making it difficult for independent online retailers to compete on its website.
Cloudtail, one of the largest Amazon sellers in India, pays Amazon a 6.3% fee for electronic products, while independent sellers pay nearly 28.1%, the group claims on the deposit.
Amazon says it provides an e-commerce platform in India to more than 650,000 sellers.
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