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Small retailers urge PM to order probe into Amazon’s smartphone sales

Probe urged against Amazon

The All India Mobile Retailers Association (AIMRA), on Monday urged Prime Minister Narendra Modi to investigate Amazon’s business practices in the country for the alleged violation of FDI rules.

AIMRA, which claims to represent 150,000 mobile phone stores, in a letter sent to the PM cited a Reuters report published last month that revealed Amazon has for years given preferential treatment to a small group of sellers on its Indian platform, using them to circumvent the country’s strict foreign direct investment (FDI) regulations.

The report was based on internal Amazon documents dated between 2012 and 2019.

“We were already aware of Amazon’s thought process and strategy and the report has revealed that Amazon is doing business in India with the strategy of deftly dodging the regulators,” the letter states.

AIMRA urged the government to “suspend all Amazon activities in India” until there is an investigation into the company’s practices.

Amazon says it doesn’t give preferential treatment to any seller on its marketplace and has always complied with Indian law.

Indian retailers have been alleging for  a long time d that Amazon and Walmart’s Flipkart flout government rules and that their business practices hurt small traders. The companies, which run the two biggest e-commerce platforms in India, deny the allegations.

The Amazon documents reviewed by Reuters showed the company helped a small number of sellers prosper on its website, discounted their fees and helped one cut special deals with big tech manufacturers such as Apple Inc.

Some 35 of Amazon’s more than 400,000 sellers in India in early 2019 accounted for around two-thirds of its online sales, the documents also showed.

The AIMRA letter urged government should cap a single seller’s daily smartphone sales on Amazon and Flipkart at Rs 500,000.

The group also alleges the U.S. firms promoted sales on their platforms through preferred sellers, asking the government to investigate tie-ups between smartphone brands and these sellers.