India’s monetary crime company has raided places of work of some sellers working Amazon and Walmart-owned Flipkart in an investigation into alleged violations of overseas funding guidelines, two authorities sources mentioned on Thursday.
The searches come weeks after Reuters reported India’s antitrust physique had discovered the 2 corporations and their sellers violated competitors legal guidelines by giving desire to pick out sellers on their platforms. Each corporations have maintained they adjust to Indian legal guidelines.
One senior authorities supply mentioned raids have been being carried out in New Delhi, Mumbai, and Bengaluru, however didn’t give names of sellers whose places of work have been being raided.
“The raids on sellers of Amazon and Flipkart is part of ED’s probe … for alleged violations of overseas trade legal guidelines,” mentioned the primary authorities supply with direct data.
Amazon and Flipkart didn’t instantly reply to requests for remark. A consultant of the monetary crime company mentioned he had no rapid remark.
The raids are the newest setback for Amazon and Flipkart, which depend India as a key progress market the place e-commerce gross sales are quickly rising.
The Enforcement Directorate company has been investigating each e-commerce giants for years for allegedly bypassing overseas funding legal guidelines that strictly regulate multi-brand retail and prohibit such corporations to working a market for sellers.
The primary authorities supply on Thursday mentioned it was conducting the newest searches on the observations of the antitrust physique in its lately concluded investigation of the 2 corporations.
These Amazon and Flipkart antitrust investigation experiences from August, which aren’t public however have been seen by Reuters, say the platforms “had end-to-end management over the stock and the sellers are simply identify lending enterprises.”
A Reuters investigation in 2021, primarily based on inner Amazon papers, confirmed the corporate exerted important management over the stock of a few of the greatest sellers, despite the fact that Indian legal guidelines prohibit overseas gamers from holding stock of merchandise.
India’s commerce minister in August publicly slammed Amazon, saying its investments in India have typically been used to cowl its enterprise losses, including that such losses “scent of predatory pricing.”
© Thomson Reuters 2024
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