A brick-and-mortar retailers group has accused e-commerce giants including Flipkart and Amazon of violating foreign investment rules and has sought action against them, The Economic Times reported on Monday. The group includes Reliance Retail and Future group.
In a letter to Union Commerce and Industry Minister Suresh Prabhu, the Retailers Association of India claimed that the e-commerce firms have found loopholes to avoid restrictions on online market places, the newspaper reported. They accused the firms of influencing prices and illegally funding “abnormal discounts”.
According to existing rules, foreign-funded companies in India are allowed to have 100% foreign funding as long as their operations are limited to providing a platform for other retailers and vendors to conduct business. The Retailers Association of India claims that the e-commerce companies have been violating Press Note 3 in 2016 that orders online portals to refrain from influencing product prices on their platforms.
The group has alleged that these companies have violated this rule several times.“Marketplace operators/technology platform providers have been operating against the spirit of the policy for some time now,” the daily quoted the letter as saying. “There is an ambiguity around these guidelines which can be worked around by marketplace operators to overcome the restrictions defined.”
Flipkart and Amazon insisted on their compliance with the law. “We conduct our business with highest standards of integrity and in compliance with applicable laws,” a Flipkart spokesperson told The Economic Times.
An Amazon India spokesperson said the company is a pure third-party marketplace.
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