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DPIIT asks Amazon and Flipkart to disclose top 5 sellers, business model: Report

The Department for Promotion of Industry and Internal Trade (DPIIT) has asked Amazon and Flipkart to disclose names of top 5 sellers on their platform, price of goods sold by preferred vendors and support to sellers, reports PTI. Apart from that, DPIIT has also asked the platforms to share their capital structure, inventory management system and business, according to the report.

MediaNama has reached out to Amazon and Flipkart for comment and will update this when they reply.

Other questions that DPIIT has asked: Total number of sellers listed on their platforms; list and share of controlled and uncontrolled sellers; distributor and retailer price list for preferred/controlled vendors and proportion of total sales from top five sellers, the report said.

Why is this being done? Offline and online retailers have blamed Amazon and Flipkart of indulging in deep discounting practices and preferential treatment to a few sellers. At a CCI workshop last month, the Confederation of All India Traders (CAIT) asked Amazon and Flipkart as to how they continue to sell products at discounted prices despite being in heavy losses. The body had also urged these platforms to reveal their top 10 sellers.

In November 2018, the All India Online Vendors Association (AIOVA) had alleged that Flipkart used its dominant market position to favour certain sellers through “unfair or discriminatory” pricing. The association argued that by selling goods to companies such as WS Retail, which then sells the products on Flipkart, Flipkart was creating a class of preferred sellers. Also, Flipkart’s own private labels such as SmartBuy and Billion created a conflict of interest.

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The CCI had dismissed AIOVA’s appeal against Flipkart, but the National Company Law Tribunal (NCLAT) admitted a petition filed by trade body AIOVA on May 21 which challenged the orders of CCI absolving Flipkart of unfair practices using its dominant position.

CCI’s market study on the e-commerce sector: The Competition Commission of India (CCI) carried out a study on the e-commerce sector to seek details on how inventory-based models work, including pricing of products and control over prices. The commission’s questions, sent to all major e-commerce firms, asked for details on inventory management, pricing (factors impacting pricing and who decides pricing), on exclusivity and contractual agreements, private labels, and B2B services.

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