ED serving notice to Flipkart and not Amazon 'raises suspicion': CAIT

Influential trade association writes to investigating agency, appeals to commerce and finance ministers.

An influential trade association has told the government the Enforcement Directorate (ED) “served notice only to Flipkart and not to Amazon” when the Karnataka High Court had prime facie found both e-commerce firms guilty of indulging in anti-competitive prices.

ED’s action “raises suspicion”, said Praveen Khandelwal, national secretary general of the Confederation of All India Traders (CAIT), in a letter to the investigating agency’s director after it sent a Rs 10,600-crore recovery notice against Flipkart for allegedly violating foreign exchange rules.

CAIT said it has also made a representation on Saturday to Piyush Goyal, minister for commerce and industry, and Finance Minister Nirmala Sitharaman and urged them to take action. 

A spokesperson of Amazon India did not respond to queries on the issue.

CAIT has been in the forefront of a campaign against global e commerce companies, saying they should be banned and penalised for allegedly violating foreign investment policies. However, the global e commerce players have stood firm that there have not been any violations at all. CAIT has urged that their anti-competitive policies have destroyed the livelihood of small traders.

In its response to the draft amendment to the government's Consumer Protection ( e-commerce) Rules 2020, CAIT has suggested some sweeping changes, It wants a a clear transparent definition of different e commerce entities. According to CAIT, an inventory e-commerce entity would mean an entity which runs a retail store on its own e commerce platform, owns the inventory of goods and services and sells such goods and services directly to the consumer on a principal to principal basis. 

It has also suggested that no e-commerce entity shall make any segmented offers to particular consumers on an arbitrary basis. The classification of consumers shall be on a transparent and objective basis and offerings shall be uniform across consumers. Secondly, an e-commerce firm will also not use the information collected for sale of goods directly or indirectly by any seller related or not. Thirdly, an e commerce marketplace entity cannot directly or indirectly license its brand or private label products to third parties to be sold on the platform.