On March 3, 2022, CCI dismissed allegations of anti-competitive vertical agreements entered into by Amazon Seller Services Pvt. Ltd. (‘Amazon Seller’), Amazon Wholesale India Pvt. Ltd. (‘Amazon Wholesale’), Amazon Retail India Pvt. Ltd. (‘Amazon Retail’), Cloudtail India Pvt. Ltd. (‘Cloudtail’), and Prione Business Services Pvt. Ltd. (‘Prione’) (collectively referred to as ‘Entities’), made by All India Online Vendors Association (‘AIOVA’).^[1]

AIOVA submitted that it is an association of more than 2000 sellers that sell their products on various e-commerce platforms and that AIOVA facilitates discussion and provides assistance to its members (i.e., sellers) with various administrative and government agencies. AIOVA further submitted that: (i) Amazon Seller operates the e-commerce platform ‘Amazon.in’ where sellers register and sell their goods by paying certain fees; (ii) Amazon Wholesale is a wholesale arm (business-to-business) of Amazon Seller, which buys goods from the manufacturers in bulk at lesser prices and allegedly sells them at a loss to its related vendors (i.e., Amazon Retail and Cloudtail), who also operate on the marketplace operated by Amazon Seller. Cloudtail is owned by Prione, which is a joint venture between Amazon Asia Pacific Resources Pvt. Ltd. and Catamaran Advisors LLP.

AIOVA had alleged that Amazon Seller is one of the largest online marketplaces in India and most sellers/manufacturers have no option but to sell on this platform (or run the risk of losing out on significant market presence). As a result, most brands invest capital and time to appear at the top of search results on the marketplace, which has allegedly created a lock-in effect as brands/sellers, if intending to shift to another, cannot transfer their ‘Reviews/Ratings’ or ‘Best Seller’ status to other competing marketplaces. AIOVA has, inter alia, alleged that: (i) Amazon Wholesale directly buys goods in bulk from the manufacturers and sells them at a loss (unlike other wholesalers who sell at a profit), to Amazon Retail and Cloudtail, which is thereafter sold by Amazon Retail and Cloudtail to consumers at massive discounts on Amazon Seller’s platform; (ii) most sellers that sell similar categories of goods as Amazon Retail and Cloudtail on Amazon Seller’s platform are unable to sell products at such losses; (iii) this anti-competitive arrangement was alleged to drive out existing and independent sellers out of the marketplace, thereby resulting in foreclosure of competition; (iv) Amazon Retail and Cloudtail, ‘in collusion’, act as retailers/sellers by selling third party goods and equally selling their own private label goods at massive discounts (after exploiting data of successful manufacturers/sellers); and (v) Amazon Seller charges higher platform fees from independent sellers compared to what is charged from Amazon Retail and Cloudtail. In sum, AIOVA alleged that the ‘lack of platform neutrality’ on Amazon Seller’s marketplace resulted in foreclosure of competition.

CCI noted that the Entities’ conduct of indulging in deep discounts is creating distortionary effects on the market, driving out existing competitors and creating entry barriers. CCI considered the arguments raised by AIOVA and directed them to provide a response to certain information/clarifications. CCI also directed AIOVA to file a certificate under Section 65B of the Indian Evidence Act, 1872 in support of the electronic evidence relied upon in its complaint. However, despite being given numerous opportunities, AIOVA did not either provide the necessary information/clarifications sought by the CCI or submit the certificate under Section 65B of the Evidence Act, 1872 sought by CCI. Consequently, CCI dismissed the allegations against the Entities as the allegations were devoid of admissible / requisite evidence and therefore, insufficient for CCI to form a prima facie view. Accordingly, CCI passed a closure order under Section 26(2) of the Act.

[1] AIOVA Sellers Association v. Amazon Seller Services Pvt. Ltd. and Ors., Case No. 29 of 2020, Order dated March 3, 2022.