New Delhi: The Enforcement Directorate (ED) has conducted raids at 19 premises located in Delhi, Bengaluru, Mumbai, Hyderabad and Panchkula in Haryana) at main vendors of Amazon and Flipkart under Foreign Exchange Management Act (FEMA).
The Enforcement Directorate initiated its probe under FEMA following several complaints against Amazon and Flipkart, the E-commerce entities.
Companies violated level playing field
The complaints alleged that the two e-commerce entities are violating FDI Rules by directly or indirectly influencing the sale price of goods or services and not providing level playing field for other Vendors.
The agency has reportedly conducted raids in at least 15 locations. Citing official sources, a report in Hindustan Times said that the Competition Commission of India (CCI) during its anti-trust probe found the two e-commerce giants violated local competition laws and favoured select vendors. The probe also found that the two giants offered high discounts thereby harming interests of other firms.
CAIT and AIMRA approached CCI
Earlier, the Confederation of All India Traders (CAIT) and All India Mobile Retailers Association (AIMRA) had also approached CCI and sought immediate suspension of operations of of the e-commerce giants alleging predatory pricing and heavy discounts on products by them, reported PTI.
The complainants in the CCI alleged that the practices by Amazon and Flipkart are giving rise to grey market in the mobile phone segment causing financial losses to the government. Recently, Union Commerce Minister Piyush Goyal also highlighted the similar concerns by e-commerce giants and questioned USD 1 billion investment by Amazon in India.
The Union Minister had also alleged that the e-commerce giants are gobbling up into small retailers’ high margin products through which they surviving.
