Amazon, Flipkart Vs CAIT: A Timeline Of The Row

The tiff between online marketplaces and CAIT started more than five years ago when the traders' body accused e-commerce platforms of not complying with FDI norms

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Traders’ body, the Confederation of All India Traders (CAIT), has written to the commerce minister Piyush Goyal asking for suspension of Amazon operations in India. It has demanded “immediate action” against Amazon and has called the online marketplace an “IPC 420 multiplied by 2” culprit.

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CAIT has raised a red flag saying that Amazon didn’t reveal its strategic interest in Future Retail while seeking approval for the deal. It also said that Amazon has a “hidden agenda to control and dominate not only the e-commerce trade but also offline retail trade and to wipe out competition by overtaking prospective competitors”. 

This comes in the backdrop of the Competition Commission of India (CCI) recently suspending the Amazon-Future Coupons deal from 2019 temporarily and imposing INR 200 crore penalty. CAIT also said that the deal also violated FEMA and FDI policy thus, the Enforcement Directorate should take immediate action against Amazon as the ‘evidence is right before it in the form of CCI order’.

The clash between Amazon and CAIT is not new. It started more than five years ago when the traders association accused e-commerce platforms like Flipkart of not complying with FDI norms and offering deep discounts, leading to a huge loss in business for local vendors.

Here is a timeline of the sequence of events since then. 

May 2016: Traders’ body filed a complaint against Flipkart for violation of guidelines on FDI in e-commerce to the Department of Industrial Policy and Promotion (renamed as Department for Promotion of Industry and Internal Trade (DPIIT) in 2019). Its complaint was based on a newspaper ad announcing the sale of an item at a discounted price to be available only on Flipkart

“We have been demanding a regulatory body to monitor the trade of e-commerce marketplaces and their policies towards sellers. We had made this demand to the e-commerce Committee formed under NITI Aayog in the year 2016 where we were assured they will immediately start working on it.”

September 2017: “Amazon has declared Great Indian Festival Sale from 21 September to 24 September 2017 and Flipkart has conducted Big Billion Day Sale from 20-24 September 2017, Snapdeal has announced Unbox Diwali Sale from 20 to 25 September 2017, Jabong Sale from 20 to 24 September 2017, Myntra Sale from 20 to 24 September 2017, Shopclues has announced Maha Bharat Diwali Sale from 20 to 28 September 2017 which is a blatant violation of the guidelines issued by the DIPP in the FDI Policy,” said CAIT. 

May 2018: CAIT and the All India Online Vendors Association (AIOVA), said in a statement, “We have been demanding a regulatory body to monitor the trade of e-commerce marketplaces and their policies towards sellers. We had made this demand to the e-commerce Committee formed under NITI Aayog in the year 2016 where we were assured they will immediately start working on it.”

October 2018: CAIT raised its voice against Walmart-Flipkart deal. It said that the US retail major may cause an appreciable adverse effect on competition as if that happens its “predatory tendencies” would be on a much larger scale.

September 2019: CAIT wrote a letter to the ministry of commerce and industry stating that during festival sales e-commerce companies violet the FDI policy and offer deep discounts and follow an inventory-based model. 

October 2019: The CAIT wrote to Prime Minister Narendra Modi asking his intervention in the issue. CAIT also met the Piyush Goyal to discuss the issue. The government promised the traders body that it would take corrective action if these places are found violating norms. 

November 2019: Amazon and Flipkart denied any such violation denied violation of FDI norms during their recent sale events, at a meeting held by the DPIIT. In an important development at the meeting, however, the CAIT showed emails sent by Flipkart and Amazon to sellers, asking them to offer discounts on a sharing basis and reward them back with credits, according to CAIT secretary general Praveen Khandelwal.

January 2020: Amazon founder and CEO, Jeff Bezos, visited India to discuss the issue with Prime Minister Narendra Modi and other government officials.

January 2020: The traders’ body called for protests across 300 cities during Bezos’ stay in India.

February 2020: The e-commerce giants sought a stay order on the CCI probe at the Karnataka High Court. The court ordered an interim stay on CCI’s proposed investigation.

August 2020: AIOVA filed an antitrust case against Amazon with the CCI accusing it of anti-competitive practices through preferential treatment of brands and sellers. 

December 2020: The DPIIT forwarded four complaints by CAIT to the Reserve Bank of India (RBI) and Enforcement Directorate to take “necessary actions. The complaint also mentioned the deal between Flipkart and Aditya Birla Group for violating the FDI policy.

January 2021: Amazon and Flipkart denied all the allegations against them at the Karnataka High Court. It said that the CCI lacks a credible, bonafide source to carry forward the investigation. 

November 2021: CAIT claimed that Amazon is “actively involved in the smuggling of Marijuana through its platform”. This came after two people were arrested in Bhind district of Madhya Pradesh with 21 kilograms of the drug and police found that they had transacted around 1,000 kg of it through the online platform. Later, the traders' body also accused that Amazon was selling the chemicals used for making the improvised explosive devices (IEDs) used in the 2019 Pulwama attack. The body held a protest in over 1200 cities demanding investigation over the same.

December 2021: CAIT raised a red flag saying that Amazon didn’t reveal its strategic interest in Future Retail while seeking approval for the deal. It also said that Amazon has a “hidden agenda to control and dominate not only the e-commerce trade but also offline retail trade and to wipe out competition by overtaking prospective competitors”. 

S Shanthi

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Entrepreneur Staff

Shanthi specializes in writing sector-specific trends, interviews and startup profiles. She has worked as a feature writer for over a decade in several print and digital media companies. She is also a mom who looks forward to playing a game of cards with her tween daughter every evening after work.