A recent media report accusing Amazon of trying to kill Indian brands by rigging search results and other dubious practices has angered trade bodies in India. The US online retailer was already under the scrutiny of the Competition Commission of India over alleged anti-competitive practices, predatory pricing and preferential treatment of sellers.
Offline retailers’ body Confederation of All India Traders and Alliance of Digital India Foundation, a non-profit representing some of India’s biggest startups, urged the Indian government to intervene and take action against the US e-commerce giant.
According to the report, Amazon’s team in India “secretly exploited internal data from Amazon.in to copy products sold by other companies, and then offered them on its platform” and also “rigged Amazon’s search results” so that the company’s products would appear on top. The company allegedly promoted sales of its private brands like AmazonBasics by rigging search results.
Amazon has said the report was “factually incorrect” and “unsubstantiated.”
Itn sworn testimony before the US Congress last year, Amazon founder Jeff Bezos said the company prohibits its employees from using data on individual sellers to help its private-label business.
However, the offline traders’ body representative, Praveen Khandelwal, said, “Amazon is causing a great disadvantage to the small manufacturers. They are eating the cake that is not meant for them.”
The outfit claims to have the support of 80 million retail stores in the country. They have time and again alleged that e-commerce giants such as Amazon and Walmart-owned Flipkart were indulging in unfair business practices that hurt smaller firms. However, the e-commerce giants have denied allegations.
The Alliance of Digital India Foundation said the report raises questions about “the credibility of Amazon as a good faith operator in the Indian startup ecosystem.” The group wants the Indian government to take action against “Amazon’s predatory playbook of copying, rigging and killing Indian brands.”
Last month Amazon landed in a controversy over bribery allegations. A website, the Morning Context, reported that a whistleblower had flagged allegations of Amazon’s legal team bribing Indian government officials.
The US giant had launched an investigation of some of its legal representatives and sent its senior corporate counsel on leave. The report had said legal fees paid to an independent lawyer hired by the company were in part “funneled into bribing government officials.” The company had spent around $1.2 billion on legal expenses during 2018-20.
Amazon is also locked in a legal fight with the Future Group over its $3.28 billion deal with Reliance Retail – which is promoted by India’s richest man, Mukesh Ambani. Amazon is an investor in Future Coupons, which is a shareholder in Future Retail. This deal gave Amazon the first right of refusal during a stake sale.
There is also a non-competition clause that prevents Future Group from approaching Amazon’s competitors. Amazon alleged Future has violated the contract by agreeing to sell its retail assets to Reliance Industries.