Industry leaders criticised Amazon on Wednesday after report said company rigged search results to boost its own products in India, one of the e-commerce giant’s fastest growing markets.
Amazon has been accused of repeatedly ripping off the products it sells on its website and of using its vast trove of internal data to promote its own merchandise at the expense of other sellers. The allegations have been refuted by the company, Reuters reported Wednesday.
Internal doc show Amazon rigged search results to promote own products
According to a Reuters report that combed through thousands of pages of internal Amazon documents, the Amazon team in India “secretly exploited internal data from Amazon.in to copy products sold by other companies, and then offered them on its platform,” as well as “rigged Amazon’s search results” so that the company’s products appeared on top.
According to Praveen Khandelwal, Secretary General of the Confederation of All India Traders (CAIT), this should be thoroughly investigated by the Indian government.
“@narendramodi Ji, it’s astonishing that Govt agencies have not taken any cognisance or have asked #reuters to share the papers,” he tweeted.
According to the report, one of the victims of Amazon’s anti-competitive practises was a popular shirt brand in India called John Miller, which is owned by the Kishore Biyani-founded Future Group, which is currently embroiled in a legal battle with Amazon.
“Amazon decided to ‘follow the measurements of’ John Miller shirts down to the neck circumference and sleeve length, the document states”, according to the report.
According to a spokesperson for Biyani’s Future Group quoted in the report, “they (Amazon) are in a powerful position of being both an online marketplace operator and a seller and collector of data. This is leading to misuse of consumer and seller data giving them the power to kill Indian entrepreneurs and their brands“.
Amazon can’t confirm the claims made by Reuters report
Amazon said in a statement that: “As Reuters hasn’t shared the documents or their provenance with us, we are unable to confirm the veracity or otherwise of the information and claims as stated. We believe these claims are factually incorrect and unsubstantiated”.
After recent reports of bribery charges against its legal representatives and associated legal firms in the country, Amazon has been at the centre of controversy in India.
The company is also under investigation by the Competition Commission of India (CCI) for alleged anti-competitive practises, as well as an investigation by the Enforcement Directorate for violations of domestic laws.
The Directorate General of Goods and Service Tax Intelligence (DGGI) has also issued a show-cause notice to Cloudtail, one of its subsidiaries, for GST and indirect tax evasion.
Amazon has also filed a legal challenge to Future Group’s agreement with Reliance Retail to sell its retail, wholesale, logistics, and warehouse operations to Reliance Retail Ventures.
According to CAIT, Amazon’s clarification on legal professional charges is “a blatant lie in order to hide its illegal business practices and is inconsistent with the regulatory filings of Amazon and its group companies”.
CAIT stated in a letter to Commerce and Industry Minister Piyush Goyal that Amazon has spent Rs 5,262 crore on legal professionals.
Furthermore, even if one accepts Amazon’s clarification that the legal charges were only Rs 52 crore, Amazon must clarify who paid the remainder, i.e. Rs 5,210 crore, as professional charges, according to the letter.
“Amazon is hell bent on discrediting Prime Minister Narendra Modi’s tireless efforts to protect small traders and safeguard their interests. Amazon’s business practices have instead been destroying these very traders and have caused large scale unemployment in the sector. It is only expedient in public interest that an urgent and time-bound inquiry by the CBI must be ordered into Amazon India’s self-admitted charges,” CAIT said.
Amazon launches investigation
According to reports, Amazon, the world’s largest online retailer, has launched an investigation into the conduct of its legal representatives in India.
“We have zero tolerance for corruption. We take allegations of improper actions seriously, investigate them fully, and take appropriate action. We are not commenting on specific allegations or the status of any investigation at this time,” a company spokesperson had said in a statement.
However, CAIT demanded: “It is also suggested that Amazon India’s operations, in all forms, must be suspended before it does any more damage or resorts to any other financial irregularity. A strong example must be set here so that it proves to be a deterrent for Amazon and companies like it from taking Indian law and government agencies for granted.”
Panchjanya, an RSS-leaning journal, launched an attack on Jeff Bezos-founded Amazon last month, with a cover storey comparing it to the second generation of the East India Company, which entered India with business interests but ended up colonising the country for 200 years.
After allegations of bribery surfaced against Amazon, the cover storey with Bezos’ picture accused the company of engaging in corrupt practises.