Commerce and industry minister Piyush Goyal has warned eCommerce companies like Amazon, Flipkart of strict action if they don’t halt predatory pricing on their platforms, flouting foreign direct investment (FDI) rules, said officials with knowledge of the matter.
The issue figured in a discussion Goyal had with Amazon India head Amit Agarwal on 5th Nov 2019, they said.
“Ecommerce companies need to comply with the rules — we have told them to stop predatory pricing,” said one of the officials.
According to media reports, the eCommerce majors have grossed up over USD 3 billion in gross merchandise value during the festive sales held over the past fortnight, which typically see over half of their annual sales
“E-commerce companies have no right to offer discounts or adopt predatory prices. Selling products cheaper and resulting in the retail sector to incur losses is not allowed,” Goyal told reporters here.
They are also not permitted to own products and sell them, he said and that they are only platforms helping sellers connect with potential buyers.
The Competition Commission of India said last year that Flipkart and Amazon were not dominant among online marketplace platforms in the country. They, therefore, didn’t contravene Section 4 of the Competition Act, which deals with anti-competitive issues, it had said.
“We continue to engage with the government and have emphasized how we have consistently worked closely with local Kirana stores and other small businesses in the last six years,” an Amazon spokesperson told ET. “We have over 23,000 Kirana stores as IHS (I Have Space) stores across 350 cities, over 14,000 Amazon Easy stores across 22 states and nearly 60% of our top 2,000 sellers are offline retailers.”
