Confederation of All India Traders (CAIT) has written a letter to Shri Piyush Goyal, Hon’ble Minister for Commerce and Request for point wise investigation against Cloudtail India Limited (Company of Mr Narayan Murthy ) and Appario Retail (P) Limited which are joint ventures with Amazon India Limited. CAIT also accused some Banks of helping Amazon to manipulate prices on it’s platform.
Relevant Extract of the letter is as follows:-
“We refer to earlier complaints about malpractices being carried by U.S. e-commerce company Amazon, wilfully dodging rules, laws and policies of India.
In this context, we reiterate that not only Amazon, its joint ventures in India too are hand-in-glove and knowingly helping it desecrating our country’s rule of law.
It is also deeply worrying that some banks are colluding with Amazon by helping it keep prices lower than the market through exclusive policies giving cashback.
Specifically:
1. We draw your kind attention towards Cloudtail India (P) Limited, a company owned by Sh Narayan Murthy, Appario Retail (P) Limited, owned by Mr. Ashok Patni, Darshita Etel-Darshita Mobiles, STPL-Green Mobiles and Rocket Kommerce.
These together control —80% of business on Amazon marketplace. Though according to law and policies. the marketplace (Amazon) should not have relation or control over the retailer (eg Cloudtail), these retail companies are fully controlled by Amazon. Thus, Amazon’s ‘marketplace” narrative is a mere myth.
In Cloudtail and its holding company, Prione Business Services, it is no coincidence that the managing directors, CFOs, key persons are (so-called) former employees of Amazon. Even the majority of board members of Cloudtail are (so-called) former employees of Amazon. No surprises that Sh Murthy owns 76% in Cloudtail (and Prione owns 100% of Cloudtail) yet the board of directors have Amazon in majority. To reiterate, Cloudtail and Phone are managed and operated by Amazon via (so-called) former employees.
In Cloudtail and its holding company, Prione Business Services, MD, CFOs, senior employees are all (so-called) former employees of Amazon. Even the Board of Cloudtail is a melange of present and (so-called) former employees of Amazon, including S/Shri Amit Agarwal, Amazon; Sandeep Varaganti, MD, former Amazon employee: Rajesh Jindal, MD, former Amazon employee; Komal Patwari, Prione legal counsel; Amit Ranade, Catamaran; Nithyanandan R (former Infosys Global Counsel), Catamaran; Arjun Narayanswamy, Catamaran; Sheetal Bhat, Catamaran, whereas the Board of Cloudtail include S/Shri Rajesh Jindal, MD. Prione a former Amazon employee; Komal Patwari, Phone legal counsel; Sumit Sahay, MD; Cloudtail, former Director of Category
Leadership, Amazon; Amit Ranade, Catamaran; and Nithyanandan R (former Infosys Global Counsel), Catamaran.
The above structure lays bare the brazenness and intent of Amazon. Even though Sh Murthy holds the majority of shares, he has allowed the (so-called) former employees of Amazon on the driver’s seat of both Cloudtail and Prione. This points to complicity of Sh Murthy and possible financial contributions by Amazon, making Sh Murthy and each of the named individuals wilful -partners in crime.” The role of Sh Murthy requires appropriate investgation.
2. We draw your kind attention towards various schemes of the different banks for giving 10% discount/cash back on a regular basis from time to time for purchase of any product from the portal of e-commerce companies Amazon & Flipkart. The banks include, HDFC Bank, State Bank of India, ICICI Bank, Citi Bank, Kotak Mahindra Bank, HSBC, Bank of Baroda, RBL Bank, Axis Bank.
The above are providing these cash discounts only on purchase of goods from e-commerce by making payment through their Debit/Credit Cards but if the same goods is purchased from a Brick & Mortar shops of crores of our members, this discount is not provided. This is amounts to between two sets of traders thus violative of the Preamble to the Constitution of India which guarantees “Equality and restricts the consumers to purchase goods from offline (read Amazon & Flipkart) shops and violative of Article 19 and Article 301 guaranteeing freedom to trade and commerce in the country.
Providing cash back exclusively to online shoppers through Amazon & Flipkart assumes the status of a cartel which leads to helping them indulge into malpractices like predatory pricing, exclusivity and creation of an uneven level playing field in the market specifically restricted under Press Note No.2 of the FDI policy.
This cartel among banks with Amazon & Flipkart encourages unfair competition in the market prohibited under Section 3(1) read with Section 3 (3) of the Competition Act. As you are kindly aware, Section 2 of the Competition Act among other things prohibits agreements which cause or are likely to cause an appreciable adverse effect on competition in India.
We request point-wise investigation on the above under your reference and speedy action before brick and mortar business in India and crores of jobs therein are irretrievably maimed. ”
Download Copy of Letter by CAIT to Shri Piyush Goyal, Hon’ble Minister for Commerce
