Traders' body CAIT on Friday alleged that e-commerce firms Amazon and Flipkart have violated foreign direct investment norms by indulging in predatory pricing, a charge which was rejected by the two companies.
The Confederation of All India Traders (CAIT) flagged these allegations in a meeting called by the Department for Promotion of Industry and Internal Trade (DPIIT) here, which was attended by representatives of Flipkart and Amazon.
"We are not satisfied by the result of the meeting. We placed various evidences of predatory pricing, deep discounting, controlling inventory by portals, exclusivity and total violation of FDI policy by both Amazon and Flipkart," CAIT Secretary General Praveen Khandelwal told reporters after the meeting.
He said both the portals denied all charges and stated that they comply with the policy in its letter and spirit.
On deep discounting also, the companies strongly deny that they are not offering discounts and it is the brands which offer those discounts.
The traders' body has time and again raised these issues particularly during festive season, when these platforms bring in a lot of offers for customers.
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According to consulting firm RedSeer, e-commerce companies such as Flipkart and Amazon could generate up to USD 6 billion or Rs 39,000 crore in sales this festive season.
Khandelwal claimed that since both the firms have passed the buck on brands, he will soon write to all brands and ask them to clarify their position on these.
"If need be, we will not hesitate to approach the Competition Commission of India or Court to make brands clarify their position. Whoever is giving deep discount must be flouting one or the other law or policy," he said.
CAIT also showed e-mails sent by Flipkart and Amazon to sellers asking them to offer discounts on a sharing basis and reward them back with credits, he added.
Commenting on the meeting, Rajneesh Kumar, Chief Corporate Affairs Officer of Flipkart, said they highlighted how as marketplace, the company is enabling lakhs of sellers and artisans to connect with customers across India.
"We are deeply committed to doing business the right way in India...We continue to be willing to work with the government and all stakeholders to promote a regulatory environment that creates balanced growth that is good for India," he said in a statement.
An Amazon spokesperson said, "We had an open and transparent interaction with CAIT. We offered our commitment to help onboard CAIT traders to be part of the digital economy and reach customers across india and worldwide."
The meeting, which was chaired by the additional secretary in the Department, Shailendra Kumar, was held separately with both the companies. CAIT members were present in both the meetings.
Kumar also held the meeting with representatives of Amazon and Flipkart on Thursday, following a complaint by CAIT.
Khandelwal has alleged that e-commerce companies are following unethical business model and are infringing upon foreign direct investment norms.
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