Home Business ED Raids Offices of Sellers Using Amazon, Flipkart Platforms – News18

ED Raids Offices of Sellers Using Amazon, Flipkart Platforms – News18

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ED Raids Offices of Sellers Using Amazon, Flipkart Platforms – News18


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India’s antitrust body had reportedly found Amazon and Flipkart of violating competition laws by giving preference to select sellers on their platforms.

ED conducted raids in Delhi, Mumbai and Bengaluru after alleged violation of foreign exchange laws. (PTI)

The Enforcement Directorate has raided offices of some sellers operating Amazon and Walmart-owned Flipkart in an investigation into alleged violations of foreign investment rules, two government sources said on Thursday.

The searches come weeks after Reuters reported India’s antitrust body had found the two companies and their sellers violated competition laws by giving preference to select sellers on their platforms. Both companies have maintained they comply with Indian laws.

One senior government source said raids were being carried out in New Delhi, Mumbai and Bengaluru, but did not give names of sellers whose offices were being raided.

“The raids on sellers of Amazon and Flipkart is a part of ED’s probe … for alleged violations of foreign exchange laws,” said the first government source with direct knowledge.

Amazon and Flipkart did not immediately respond to requests for comment. A representative of the financial crime agency said he had no immediate comment.

Setback For Amazon, Flipkart

The raids are the latest setback for Amazon and Flipkart, which count India as a key growth market where e-commerce sales are rapidly rising.

The Enforcement Directorate agency has been investigating both e-commerce giants for years for allegedly bypassing foreign investment laws that strictly regulate multi-brand retail and restrict such companies to operating a marketplace for sellers.

The first government source on Thursday said it was conducting the latest searches on the observations of the antitrust body in its recently concluded investigation of the two companies.

Those Amazon and Flipkart antitrust investigation reports from August, which are not public but have been seen by Reuters, say the platforms “had end-to-end control over the inventory and the sellers are just name lending enterprises.”

‘Law Will Take Its Own Course’: BJP MP Welcomes ED Action

Meanwhile, the Confederation of All India Traders (CAIT) welcomed ED’s actions as a step in the right direction and said it has been raising these issues for several years. “In the new Bharat, led by Prime Minister Shri Narendra Modi Ji, no one is above the law. I am hopeful that now the law will take its rightful course and protect the livelihoods of small shopkeepers,” said Praveen Khandelwal, BJP MP and the Secretary-General of CAIT.

“This government is committed to ensuring that no entity can harm the trading community. In response to multiple complaints filed by the trading community regarding FDI violations and the anti-competitive practices of quick-commerce companies such as Blinkit, Swiggy, and Zepto, we urge both the CCI and the ED to take swift action to prevent any further, irreparable damage to the businesses of small traders,” he added.

A Reuters investigation in 2021, based on internal Amazon papers, showed the company exerted significant control over the inventory of some of the biggest sellers, even though Indian laws prohibit foreign players from holding inventory of products.

India’s commerce minister in August publicly slammed Amazon, saying its investments in India have often been used to cover its business losses, adding that such losses “smell of predatory pricing.”

(with Reuters inputs)

News business ED Raids Offices of Sellers Using Amazon, Flipkart Platforms



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