The Enforcement Directorate will launch a second investigation into e-commerce giant Amazon, based on a Reuters report which found that Amazon has for years given select sellers preferential treatment and used them to “circumvent” India’s FDI rules, a source within the agency told the publication.
The documents reviewed by Reuters were for 2012-2019 and included business reports, draft meeting notes, emails, and PowerPoint slides, which showed that the US tech giant used various ‘strategies’ to dodge India’s regulators as and when rules protecting small lenders were imposed.
“We will be examining findings of the story. The subject matter is not entirely new for us,” the ED source told Reuters on February 18 but did not elaborate.
Moneycontrol could not independently verify the report.
Also Read | All you need to know about what the Reuters’ report reveals
Amazon did not respond to queries about the ED investigation, the report said.
This would be the second ED investigation into Amazon after the agency previously launched a probe for alleged violation of FDI rules.
The company has in public tweets refuted the news agencies' reports as “unsubstantiated, incomplete, and factually incorrect.” Stating: “In last several years, there have been (a) number of changes in regulations; Amazon has on each occasion taken rapid action to ensure compliance.”
Amazon India chief Amit Agarwal called the Reuters report “distracting” and said the company is being “misunderstood, but it will be fulfilling.”
The Reuters report on February 16 found that sellers favoured by Amazon received discounted fees and special deals with other big tech companies such as Apple. Documents also showed Amazon "exercised significant control over inventories of its biggest sellers" – though its public policy states that all sellers operate independently.
Meanwhile, in its response to the original Reuters report, Amazon stated it “does not give preferential treatment to any seller on its marketplace and has always complied with the law.” It further said that all sellers are treated in a “fair, transparent, and non-discriminatory manner, with each seller responsible for independently determining prices and managing their inventory.”