NEW DELHI – Amazon.com Inc and one of its biggest sellers in India, Cloudtail, have decided to end their relationship, they said Monday, after years of accusations from traditional retailers that the seller received preferential treatment.
A joint venture between Amazon and the Indian Catamaran controlled by Cloudtail would be renewed on May 19, 2022, and the two parties said in a joint statement that they had mutually decided not to extend it beyond that date.
The decision comes after an investigation by Reuters https://reut.rs/3xyz8er in February based on documents from Amazon showed that the American company had given preferential treatment for years to a small group of sellers, including Cloudtail, and He used them to circumvent Indian laws.
Amazon has said that it does not give preferential treatment to any seller and that it complies with the law.
In their joint statement, Amazon and Catamaran did not say why they had decided to end their joint venture, but said that the partnership operated successfully for seven years and made “tremendous progress.”
Cloudtail had been controversial, with Indian brick and mortar retailers for years accusing Amazon of giving it preferential treatment, hurting smaller retailers.
It was formed when Amazon entered into a joint venture with an entity formed by one of India’s most famous tech moguls, NR Narayana Murthy, which was later used to create Cloudtail, which began offering products on Amazon.in after its creation. in August 2014..
The Reuters investigation in February found that Amazon publicly called Cloudtail an independent seller offering products on its marketplace website, but internal company documents revealed that the American company was deeply involved in expanding it and used it, among other sellers. , to circumvent the country’s foreign investment laws.
The story had prompted ban requests and an investigation from Amazon, and the financial crime fighting agency was investigating its findings.
Amazon also gave Cloudtail, and another seller named Appario, discounted rates, the Reuters investigation found.
Amazon is also in talks with Appario’s parent to determine whether it wants to renew its joint venture next year, a source with direct knowledge of Monday told Reuters. Appario did not immediately respond to a request for comment.
The source added that a number of sellers in India are likely to take over Cloudtail’s stake in Amazon over time.
“There will be challenges, but the company is pretty sure it will cope,” the source added.
Separately, India’s Supreme Court ruled on Monday that Amazon and Walmart’s Flipkart will have to face antitrust investigations that https://reut.rs/3iuNFDA ordered against them in India, dealing a blow to companies in their market. key growth. (Reporting by Aditya Kalra in New Delhi Edited by Mark Potter and Jonathan Oatis)