Amazon gave preferential treatment to certain sellers, CCI argues in Court

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On Friday, India’s antitrust body told a court that a Reuters report showing Inc gave preferential treatment to a small group of sellers on its India platform corroborated evidence it had received and which had triggered an investigation of the U.S. e-commerce giant.

The Competition Commission of India (CCI) announced in January 2020 that it was investigating Amazon and Walmart Inc’s Flipkart following a complaint from a trader group that they were promoting preferred sellers. But the probe into alleged violations of competition law was put on hold as the two firms mounted a court challenge.

While arguing on Friday for restarting the probe, Madhavi Goradia Divan, an Additional Solicitor General of India representing the CCI, read parts of the Reuters report to the judge in the Karnataka High Court, saying it “corroborates what was said” in the original complaint.

The Reuters story, which was published last month, was based on internal Amazon documents dated between 2012 and 2019. It revealed that Amazon for years helped a small number of sellers prosper on its platform, giving them discounted fees and helping one cut special deals with big tech manufacturers.

Amazon did not immediately respond to a request for comment on Divan’s statements in court.

Amazon has said it “does not give preferential treatment to any seller on its marketplace,” and that it “treats all sellers in a fair, transparent, and non-discriminatory manner”.

The CCI’s arguments in the case come after the watchdog this week submitted media clippings, including the Reuters story, as part of its exhibits to the court.

Referring to the Amazon documents cited in the Reuters story, Divan said the CCI’s director general of investigations might call for the documents from the company and examine them.

Indian retailers, who are a crucial part of Prime Minister Narendra Modi’s support base, have long alleged that Amazon’s platform largely benefits a few big sellers and that the e-commerce company engages in predatory pricing that harms their businesses. The company says it complies with all Indian laws.

Divan read to the court from the Reuters story for roughly 15 minutes. This included a finding that some 35 of Amazon’s more than 400,000 sellers in India in early 2019 accounted for around two-thirds of its online sales.

She also referred to documents cited in the story that showed Amazon was deeply involved in expanding a big seller on its platform named Cloudtail – in which it has an indirect equity stake – even though it said publicly that Cloudtail gets the same privileges as other vendors.

“Do you do it for all the sellers,” Divan said, referring to Amazon. “These are questions that have to be asked.”

Following publication of the Reuters story, India’s financial-crime fighting agency, the Enforcement Directorate, asked Amazon for information and documents related to its operations in the country, Reuters reported last week.

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