The Confederation of All India Traders (CAIT) on Thursday urged the Competition Commission of India (CCI) to pass directions to expedite the pending investigation of the CCI and to suspend operations of Amazon in India till all ongoing investigations are concluded.
The apex body has sent a letter to the CCI Chairperson accusing Amazon of using dark pattern practices and anti-competitive practices against the consumers at large.
It was recently reported that Amazon has been indulging in dark pattern practices by knowingly forcing consumers to subscribe to their Prime membership and making it next to impossible to cancel the same, the official statement said.
The CAIT in its letter has also stated that the Federal Trade Commission (FTC) of the USA is in the process of instituting a big case against Amazon for misusing its market power to create an unequal playing field in ecommerce.
“It has come to know that the FTC is in the process of filing a comprehensive suit against Amazon for misusing its market power to selectively favour some sellers over others the same way it has been doing in India since it began its e-commerce platform in 2013,” CAIT National President B C Bhartia and Secretary General Praveen Khandelwal said.
“The FTC has alleged that Amazon has been misusing its market power to reward merchants that use its logistics and delivery services and punish those who don’t use these services,” they added.
The trade leaders further said that the fee charged for its logistics and delivery services are in addition to other platform fees such as expenses on advertising, warehousing and fixed costs, etc. that it charges from sellers.
According to CAIT, the total platform fee that Amazon charges from sellers registered on its platform has risen sharply from 35 per cent in 2016 to over 50 per cent in 2022. “This means that a seller selling a product for USD 100 is left with merely USD 50 from which he must pay all costs and other expenses,” it said.
Bhartia and Khandelwal said that the FTC has also alleged that Amazon’s algorithm to choose the best sellers for its “Buy-Box” is rigged and that it will launch an investigation into the algorithm as well.
The Buy Box is a feature that allows consumers to add products directly to their carts avoiding multiple steps and making it super easy to purchase products.
They strongly said that such practices are similar to Amazon’s practices in India where it has been favoring a few preferred/controlled/related sellers and service providers at the cost of smaller independent sellers and service providers.
Amazon has been indulging in deep discounting of products supplied by it to its preferred sellers, enabling predatory pricing by its preferred sellers, funding losses of these preferred sellers and service providers, charging no/nominal platform fees from these sellers and providing the best advertising space to them, they alleged.
Both trade leaders pointed out that there are multiple investigations pending against Amazon before the ED and the CCI for violation of the FDI Policy and Competition Law framework of India.
