Probe Against Amazon & Flipkart: ED Raids Vendors At 16 Locations; Know Why

New Delhi: In a major crackdown on vendors operating through e-commerce giants Amazon and Flipkart, the Enforcement Directorate on Thursday conducted raids on vendors at 15 to 16 locations in different cities.

Multiple locations in Delhi, Gurugram, Hyderabad and Bengaluru were searched in connection with the probe being conducted under the Foreign Exchange Management Act (FEMA), reported Hindustan Times.

The probe was initiated after antitrust inquiries by the Competition Commission of India (CCI) raised red flags about Amazon and Flipkart’s business practices. The commission found that the e-commerce giants allegedly violated local competition laws by favouring specific sellers, prioritising their product listings and offering steep discounts, to the disadvantage of other vendors.

Such actions favouring preferred vendors could harm competition and undermine fair business environment for smaller sellers on these platforms, CCI said.

Amazon and Flipkart have been under the scanner earlier also. ED has been investigating the e-commerce giants for allegedly bypassing foreign investment laws that regulate multi-brand retail and restrict such companies to operating a marketplace for sellers.

The latest searches were based on the CCI investigation reports from August, which have been seen by Reuters.

The platforms, according to the probe reports, had “end-to-end control over the inventory and the sellers are just name lending enterprises.”