Amazon continues to wind up under the scrutiny of regulators worldwide. The online behemoth now faces renewed complaints in India.
Reuters reports that the All India Online Vendors Association charges Amazon with favoring some sellers over others, thus tilting the balance against the group’s members while giving the favored companies an unfair advantage. The sellers said, in a legal finding, that the U.S.-based retail giant is driving independent vendors out of business by giving online discounts to companies it favors.
The sellers association alleges that Amazon India’s wholesale arm buys goods in bulk from manufacturers and then sells them at a loss to sellers such as Cloudtail. Such favored sellers are then able to hawk these goods on Amazon’s marketplace — at a big discount.
Reuters reported that the association’s filing this month said that “this anti-competitive arrangement ... is causing foreclosure of competition by driving independent sellers out of the market.”
Amazon has run into various regulatory challenges in India, where it has committed $6.5 billion in investments.
The Competition Commission of India (CCI) is already investigating Amazon and rival Flipkart, owned by Walmart. In that case, Amazon is defending itself from charges it violates competition law with its discounting practices.
In 2018, the same Indian vendors association made similar allegations — and filed an antitrust complaint with the CCI. The complaint argued that Amazon was favoring merchants that it partly owns, such as Cloudtail and Appario.
“There should not be any preferential treatment,” Chanakya Basa, a lawyer for the group at that time, said. More than 2,000 sellers belong to the group.
Amazon denied the claims. “Amazon has an equal relationship with all the sellers on our marketplace,” Amazon India spokeswoman Bhumika Shah said at the time. She added that that the company is “absolutely committed” to compliance with local laws.
Amazon and other Big Tech companies have faced increasing scrutiny over antitrust issues in the U.S. Last month, the CEOs of Amazon, Apple, Facebook and Google's parent, Alphabet, testified before Congress about their business practices.