Confederation of All India Traders
“Vvapar Bhawan’
925/1, Naiwala, Karol Bagh, New Delhi.110005.
Phone: .91-11-45032664 Telefax: 91-11-45032665
E-mail: teamcait@gmail.com website: www.cait.in
17th March, 2022
Ref No.: 3377/1/50
Shri Rohit Kumar Singh
Secretary
Ministry of Consumer Affairs
Krishi Rhawan New Delhi -110012
Subject: Request for urgent investigation against Amazon for illegal business practices
Dear Sir,
1. The Confederation of All India Traders (CAIT) is the representative body of over 8 croft small and medium traders and represents over 40 crone Indians who are directly and indirectly dependent on the sector for their sustenance. We have been representing issues and concerns of the trading community since 1990 and are writing to you requesting you to initiate an immediate investigation into Amazon’s illegal business activities.
2. We are writing in pursuance of a news article that was published by various prominent sections of the media (Annexure I) regarding 5 members of the U.S. House Judiciary Committee (Committee) having asked the U.S. Department of Justice (Department) to Investigate Amazon.com Inc. It has been reported by the media that Amazon has indulged in ‘potentially criminal conduct‘ and engaged in a “pattern and practice of misleading conduct that suggests it was acting with on improper purpose to influence or obstruct the panel’s investigation into competition in digital markets’ (Annexure I)
3. We would like to bring to your kind notice that the referral of the case by the Committee to the Department is a follow up of a previous warning from the members of the U.S. Committee in October 2021 accusing Amazon’s top executives about lying to Congress regarding Amazon’s systematic campaign of copying products and rigging search results in India to boost sales of its own brands.
As you may he aware, it has been reported that Amazon has been copying third party user data and misusing it for its own selfish motives (Annexure II). ‘This data, which rightfully belongs to the user and is only for the use of and third-party seller, has been misused by Amazon which first copies this data and then creates its private labels on the basis of such data. This data is an indication of consumer buying – tastes and trends and is of immense value to third party sellers who are being devoid of it by Amazon.
As per the FPI Policy. Amazon is permitted to merely operate a pureplay marketplace Le. a bridge between the buyer and seller and not control inventory of any kind. However, Amazon not only indulges in control over inventory through its related party sellers like Cloudtail and Appario and a couple of other preferred sellers but has also created a complex web of preferred sellers and service providers to whom it gives preferential treatment in the form of low/zero commission charges and platform fee, faster one-day delivery, best payment discounts and prominent visibility on the marketplace amongst others. This has been brought out in a Reuters story attached as Annexure III.
6. The referral by the Committee to the U.S. Justice Department is particularly for the misuse of data to create benchmark products and use this information to create private labels. Amazon has been using consumer purchasing preferences for its own benefit —for instance. Amazon has used the siting criteria of Men’s Shirt Brand Peter England to size its private label formal shirts and has been selling the same for 1/3rd the price. Because of this, the consumer naturally buys the Amazon product rather than Peter England to the detriment of the third-party sellers registered on its so called ‘neutral marketplace, platform’, for selling Peter England Shirts.
7. Amazon, which is supposed to be a mere bridge between buyer and seller is indulging in such practices which is a gross conflict of interest by Amazon. We are writing to you to request you to take cognizance of the matter and initiate an urgent investigation into Amazon’s wholly illegal and predatory business practices before it destroys and wipes out small and independent third party sellers in e-commerce. We would also request you to suspend Amazon’s operations till the investigation reaches its logical conclusion.
8. Further, we would request you to kindly release the lung pending Consumer Protection (E-Commerce) Rules which expressly prohibit related/associated/affiliated parties or preferred sellers to sell their goods and services on their e-commerce marketplace platform in addition to mandating every e-commerce marketplace to provide non-discriminatory atoms to each seller and service provider on its platform.
We shall be happy to provide any further information if required.
Thank You. With regards
Yours truly
Praveen Khandelwal
National Secretary General
Confederation of All India Traders
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