ED reportedly raided offices of sellers on Amazon and Flipkart
India’s Financial Crime Bureau has raided offices of some sellers operating Amazon and Walmart-owned Flipkart in a probe into alleged violations of foreign investment rules, two government sources said on Thursday.
The searches come weeks after Reuters reported that India’s antitrust agency had found that the two companies and their sellers had violated competition laws by favoring select sellers on their platforms. Both companies have maintained that they comply with Indian laws.
A senior government source said raids were carried out in New Delhi, Mumbai and Bengaluru, but did not name any vendors whose offices were raided.
“The raids on Amazon and Flipkart sellers are part of ED’s probe… for alleged violations of currency laws,” the first government source with direct knowledge said.
Amazon and Flipkart did not immediately respond to requests for comment. A representative of the Financial Crimes Unit said he had no immediate comment.
The raids are the latest setback for Amazon and Flipkart, which view India as a key growth market where e-commerce sales are rising rapidly.
The enforcement agency has been investigating both e-commerce giants for years for allegedly circumventing foreign investment laws that strictly regulate multi-brand retailing and limit such companies to operating a marketplace for sellers.
The first government source said Thursday it was conducting final investigations into the antitrust agency’s observations in its recently concluded investigation into the two companies.
Amazon and Flipkart’s August antitrust investigation reports, which are not public but seen by Reuters, say the platforms had “end-to-end control over the inventory and the sellers are merely name lending companies.”
A 2021 Reuters investigation based on internal Amazon papers found that the company exerted significant control over the inventory of some of its largest sellers, even though Indian law prohibits foreign players from holding inventories of products.
India’s commerce minister publicly criticized Amazon in August, saying its investments in India have often been used to cover its operating losses, adding that such losses “smack of predatory pricing.”
© Thomson Reuters 2024
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
