As Flipkart and Amazon India begin their festive season sales this week, the All India Online Vendors Association (AIOVA) on Friday filed a petition with antitrust regulator, Competition Commission of India (CCI), alleging that the Amazon India favours merchants that are its subsidiary, such as Cloudtail and Appario.
While Appario Retail Pvt Ltd is a wholly-owned subsidiary of the joint venture between Amazon India Ltd and Ashok Patni, the co-founder of Patni Computer System, Cloudtail, which is the largest seller on Amazon India, is a joint venture between Amazon Inc. and Infosys co-founder N.R. Narayana Murthy’s Catamaran Ventures.
AIOVA, which represents more than 3,500 online sellers, said that large sellers partly owned by Amazon India such as Cloudtail and Appario are being given preferential treatment by charging significantly less than Amazon’s advertised rates for other sellers.
AIOVA has asked CCI to impose a “severe penalty” for unfair practices and to restrict what it says are “preferred sellers” from participating in Amazon India’s annual festival sales, which start this week.
Amazon India however has denied the accusations ad said that all sellers on its platform are treated equally.
“Amazon has an equal relationship with all the sellers on our marketplace,” Amazon India spokeswoman Bhumika Shah said in an email to Reuters, adding that the company is “absolutely committed” to compliance with local laws.
Besides Amazon, Flipkart too has been accused of giving preferential treatment towards large sellers such as WSRetail, which is Flipkart’s subsidiary merchant.
Meanwhile, several small merchants have decided to nearly-boycott the upcoming festive season online sale events this year by not to actively participate in the e-commerce giants’ flagship events. Both Flipkart and Amazon India have scheduled their flagship sales—Big Billion Days and Great Indian Festival, respectively—to begin on October 10.
Earlier this year in May, AIOVA had filed a similar petition accusing Flipkart of preferential treatment towards big sellers, enabling them to provide huge discounts, hurting the business small and medium sellers.
In interactions with nearly a dozen online sellers, ET has also reported that small sellers have reduced their activity on Flipkart and Amazon India because of the e-commerce companies’ seeming preference to vendors such as RetailNet, Super-ComNet, OmniTech Retail (Flipkart), Cloudtail and Appario (Amazon India), and their own brands.
[Top Image – bnnbloomberg.ca]