Amazon India is in for a big shock, could be broken up into smaller units

• The malpractices of Amazon India are well known, and Reuters has helped the case against the company.
• The public accounts of some of the amazon companies revealed that they had paid over Rs 8,500  crores in terms of legal fees.
• Piyush Goyal criticised the company for trying to establish its monopoly in the country.

The malpractices of Amazon India are well known, and Reuters has helped the case against the company by revealing its fraud through internal documents and emails of the company. A Reuters special report published on October 13 revealed that the company rigged search results to promote its own products and sold copied brands.

Since the report by Reuters has been released, the organisations like Confederation of All India Traders (CAIT) and Swadeshi Jagran Manch (SJM), which for a long time have been arguing with the government to take action against Amazon’s malpractices, have started building further pressure.  

“Amazon is causing a great disadvantage to the small manufacturers. They are eating the cake that is not meant for them,” Praveen Khandelwal of the Confederation of All India Traders (CAIT) told Reuters. 

“I call upon people of this country to #BoycottAmazon,” Ashwani Mahajan, co-convenor of Swadeshi Jagran Manch, said on Twitter.

Aditya Kalra, the Indian journalist who broke the story, tweeted, “Amazon-designed Xessentia shirts were based on Louis Philippe. In 2016, many customers returned Xessentia shirts. Then, Amazon found John Miller was doing better, so it copied measurements inch by inch,” with the link of the report.

American politicians like Democratic Party Senator from Massachusetts, Elizabeth Warren, who has been for long building case again Amazon, used the Reuters report to argue that it is time to break the company’s monopoly. “These documents show what we feared about Amazon’s monopoly power—that the company is willing and able to rig its platform to benefit its bottom line while stiffing small businesses and entrepreneurs. This is one of the many reasons we need to break it up,” she tweeted.

Amazon is infamous for monopolistic practices and the company definitely needs to break into multiple units, just like AT&T – the American Telecom company which had a monopoly in the sector and was broken into six smaller companies. For a long time, Amazon has used the investor’s money to monopolise the market through ‘predatory pricing’ and rigging search results. China threw the company out of its market long ago and it is high time for India to either throw it out or break Amazon India into multiple units.

Read more: Reliance is fighting Amazon and Walmart’s unethical trade practices and winning

India allows FDI in the marketplace but not retail, so practically Amazon India can only provide a marketplace to the various retailers. But, in the last eight to nine years, the company has consistently abused the law of the land to sell discounted and copied goods from its affiliated companies.

Recently, the public accounts of some of the amazon companies revealed that they had paid over Rs 8,500  crores in terms of legal fees. This amount was paid over a period of two years. The subsidiaries of amazon involved in the process include Amazon Retail India Pvt Ltd, Amazon Seller Services Pvt Ltd, Amazon Transportation Services Pvt Ltd, Amazon Wholesale (India) Pvt Ltd, and Amazon Internet Services Pvt Ltd (AWS). It is highly speculated that this amount was used to bribe government officials through independent lawyers. The company is also under probe by the Competition Commission of India for its anti-competition practices. 

A few weeks ago, Union Commerce minister Piyush Goyal criticised the company for trying to establish its monopoly in the country. He said– “Big companies wield a lot of power owing to large amounts of money with them, they are trying their best to maintain their free will in the e-commerce market. To hurt our small business and traders. And after a while, it causes harm to our consumers in the long term,”. He also vowed to bring out new rules to control its monopolistic attitude.

The Ministry of Commerce is already working on an Open Network for Digital Commerce – a UPI-like platform for e-commerce, and once it is ready, the government will kick Amazon out of the country just like American Express and Mastercard were kicked out after UPI’s success.