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ED raids 16 locations in crackdown on Amazon, Flipkart vendors

ED raids 15-16 locations belonging to vendors of Amazon and Flipkart with a FEMA probe.

Official sources told Hindustan Times that the Enforcement Directorate on Thursday conducted searches against some sellers who do business on e-commerce giants like Amazon and Flipkart as part of a FEMA investigation. The central agency raided at least 15 to 16 locations belonging to these vendors.

Antitrust investigations by the Competition Commission of India have found evidence that Amazon and Flipkart flouted local competition rules by promoting select sellers, giving preferential listing to some products, and deep discounting at the detriment of other companies, officials told HT.

Sources said the action relates to the financial transactions of some of the “preferred” vendors and sellers who do business through Amazon and Flipkart-like e-commerce platforms.

Searches were carried out in Delhi, Gurugram (Haryana), Hyderabad (Telangana), and Bengaluru (Karnataka) in connection with this case, which is being investigated under the Foreign Exchange Management Act, 1999.

By investigating this case, the ED is trying to find out if e-commerce portals like Amazon and Flipkart are being misused by sellers indulging in illicit financial practices.

The two e-commerce giants have been under investigation by the Enforcement Directorate agency for years on charges of bypassing foreign investment laws that strictly regulate multi-brand retail and restrict such companies from operating a marketplace for sellers.

On Thursday, the first government source said it was conducting the latest searches on the observations of the antitrust body in its recently concluded investigation of the two companies.

Those reports, not public but seen by Reuters, said the platforms “had end-to-end control over the inventory and the sellers are just name lending enterprises.”

Source
Hindustan Times

HD News Desk

From local issues to national events and global affairs, Hindustan Dot's news desk covers the latest news and developments from India and the world.

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