Amazon is investigating a whistleblower complaint alleging that the money paid by the company in legal fees has been funnelled into bribes by its legal representatives in India, The Morning Context reported on September 20.
Although Amazon did not comment on the specific allegations or the status of the investigation, a company spokesperson told MediaNama: “We have zero tolerance for corruption. We take allegations of improper actions seriously, investigate them fully, and take appropriate action.”
What is the whistleblower complaint about?
According to The Morning Context, the whistleblower’s complaint revolves around Vikas Chopra, an independent advocate who works with Amazon, who is alleged to have used legal fees paid to him to bribe government officials. Chopra has represented Amazon on legal matters for around three years and has worked with Rahul Sundaram, an Amazon in-house senior counsel who is also reportedly under investigation by the company and has been sent on leave, the report stated. Amazon is also asking questions of its other legal representatives in the country including AZB & Partners, the report added.
If the allegations of bribery are true, it would pose a significant problem for Amazon because such practices go against the Foreign Corrupt Practices Act (FCPA), which is a US law that prohibits companies from paying bribes to foreign government officials to assist in running a business, the report stated.
CAIT calls for CBI investigation into the issue
The Confederation of All India Traders (CAIT) has written to the commerce ministry asking it to take “immediate cognisance of the sensational news regarding Amazon’s admission of bribery” and order a CBI probe into the issue.
Additionally, the confederation has requested the government to direct Amazon to suspend its e-commerce platform pending the CBI inquiry.
CAIT is also moving a representation to the US Securities & Exchange Commission (SEC) demanding a probe into this issue, the letter stated.
Amazon faces CCI investigation and new e-commerce rules
After nearly a year of legal back and forth, the Supreme Court last month dismissed pleas by Amazon and Flipkart to stop the investigation by the Competition Commission of India (CCI) into the alleged anti-competitive practices of the two e-commerce companies.
“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,” commerce minister Piyush Goyal said in response to the verdict.
The CCI’s probe against Amazon and Flipkart was ordered to investigate four alleged violations:
- Exclusive launch of mobile phones
- Promoting preferred sellers on their websites
- Deep discounting practices
- Prioritising some seller listings over others
Even before the investigation resumed, the government on June 21 proposed amendments that give the existing Consumer Protection (E-Commerce) Rules, 2020 more teeth and address a lot of the concerns that the CCI is investigating. The proposed changes, which were made in response to repeated complaints against Amazon and Flipkart, include new rules to address abuse of FDI regulations, the establishment of a grievance redressal mechanism, new display and labelling criteria for foreign goods, the prohibition of flash sales, introduction of fallback liability, among other things.
The allegations of bribery only further tarnish the reputation of Amazon in the eyes of the government, making it harder for the company to seek leniency.
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- Govt Considering SEBI-Like Independent Regulatory Authority For E-Commerce
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