Amazon CEO Jeff Bezos is not having the best run. After facing a lot of flack for donating a 'pittance' towards Australian bushfire relief, Bezos is going to arrive in India to be greeted by a Competition Commission of India (CCI) probe.
According to The New York Times, "instead of garlands, India's supervision is welcoming him (Bezos) with a new antitrust case".
IANS reports that Amazon India had only anticipated nationwide protests from industry bodies like the Confederation of All India Traders (CAIT), however, the sudden CCI probe over "deep discounting and preferential listings" on Amazon has comes "as quite a surprise". Flipkart is also going to face a similar probe.
The CCI inquiry, which has been prompted by an association of small traders, is particularly related to "the online sales of mobile phones". The case was filed by Delhi Vyapar Mahasangh as the informant versus Flipkart Internet, owned by Walmart and Amazon Sellers, as opposite parties.
According to the traders' body, "the discounts on the online platforms such as Amazon and Flipkart are predatory in nature and the government should ensure price parity in online and offline markets".
The All India Online Vendors Association (AIOVA) has also filed a petition with the CCI where they have alleged that Amazon India "favours merchants that are its subsidiary, such as Cloudtail and Appario".
This CCI probe will be spot of bother for Amazon as "indian regulators are finally evolving" and "taking stern action against multinationals like Google".
According to Prabhu Ram, Head, Industry Intelligence Group (IIG), CMR, "CCI's move to initiate an anti-trust probe against Amazon and Flipkart marks a significant shift in how it views digital commerce in India".
"The move follows from its seven-month-long market study that CCI undertook, that recommended 'greater transparency' and 'self-regulation' by the market players. It remains to be seen what changed for CCI to initiate the probe. All said, this is still a work-in-progress, with the last word yet to be spoken," Ram told IANS.
In a 11-page order, the CCI observed that "the exclusive arrangements between smartphone/mobile phone brands and e-commerce platform/select sellers selling exclusively on either of the platforms, coupled with the allegation of linkages between these preferred sellers and e-commerce companies 'merits an investigation'."
"We welcome the opportunity to address allegations made about Amazon; we are confident in our compliance, and will cooperate fully with CCI," Amazon said in a statement. Flipkart,on its part, said that it takes pride in "democratising e-commerce in India".
While all of this falls into place, thousands of traders are ready with protests in about 300 cities across the country starting January 15 when Bezos begins his visit.
"The Indian government aims to solve this with the new ecommerce policy that also is allegedly being flouted by the behemoths," says CAIT.
"The new e-commerce policy would potentially benefit small and bespoke e-commerce players, who could benefit from the level-playing field that the policy aims to provide," said Ram.