Amazon has been under scrutiny by the Regulator for several years for alleged infringements of foreign investment laws. India’s Compliance Directorate recently asked Amazon for details on its activities in the region, as the Agency continues to investigate the US e-commerce giant, a senior agency source told Reuters on Friday.
Last month, a source at the country’s federal financial-crime agency said the Directorate will look into the findings of a recent Reuters special report, which revealed that the company has granted a small group of vendors on its Indian platform preferential treatment for years, enabling them to circumvent the country’s foreign investment laws.
The Reuters special report was focused on internal Amazon records from 2012 to 2019. It offered an inside look at the Amazon cat-and-mouse game played with the Government of India, changing its corporate structures every time the Government introduced new restrictions aimed at protecting small traders.
“We’ve been searching for information” from Amazon, a Senior Enforcement Directorate Source told Reuters on Friday. “Information means information and documents,” the source said when asked if the Agency had requested paperwork from the company. The source would not elaborate on the type of documents requested or whether a company executive had been summoned for questioning.
Indian retailers, who are a core part of Prime Minister Narendra Modi’s support base, have long argued that e-commerce companies like Amazon and Walmart’s Flipkart are flouting federal laws and that their market practices are harming small traders. The firms are denying the charges.
The documents checked by Reuters showed that Amazon enabled a small number of sellers to thrive on its Indian website, offering them reduced fees and helping to cut one of the exclusive deals with large tech manufacturers such as Apple.
The corporation also exerted tremendous influence over the inventory of some of the largest Amazon dealers. In, the documents have shown, even though they claim publicly that all sellers work independently on their website.
