Traders’ body seeks probe into Amazon’s business

The Confederation of All India Traders (CAIT) has requested the Ministry of Consumer Affairs to investigate e-commerce giant Amazon, alleging illegal business practices.

In a letter to the ministry, the association, which represents eight crore small and medium traders in India, cited a ruling by the US House Judiciary Committee asking “the US Department of Justice to investigate Amazon Inc.” for indulging in “potentially criminal conduct”.

CAIT accused Amazon of “copying third-party user data and misusing it for selfish motives”.

This data has been used to mislead sellers and create its own private labels, Praveen Khandelwal, National Secretary General, CAIT, wrote in the letter dated March 17.

The letter, accessed by BusinessLine, said that under the FDI policy Amazon is supposed to be a pureplay marketplace hosting sellers and customers without any control on inventory.

However, “Amazon not only indulges in control over the inventory through its related party sellers like Cloudtail and Appario and a couple of other preferred sellers but also created a complex web of preferred sellers and service providers to whom it gives preferential treatment in the form of low/zero commission charges and platform fee, faster one-day delivery, best payment discounts and prominent visibility on the marketplace among others,” the letter stated, citing a Reuters article.

Khandelwal further shared examples of brands like Peter England, wherein Amazon was accused of recreating similar shirts and selling at one-third the price.

CAIT urged the Ministry to initiate an urgent investigation into Amazon’s business practices, while entirely suspending its business operations during the investigation. It also asked to fast-track the implementation of the Consumer Protection (e-commerce) Rules.

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