Amazon says it has ‘zero tolerance’ for graft, after report alleges Indian officials were bribed

E-commerce giant Amazon has started an investigation in India after allegations that its lawyers had bribed government officials, The Morning Context reported on Monday.

As the website first reported, a whistleblower has alleged that the legal fee that Amazon paid to a counsel for the firm was channeled to bribe government officials.

The e-commerce company has been conducting an inquiry into the allegations for about two months, an unidentified official told Reuters. The company has also been questioning more of its legal representatives in India, according to The Morning Context.

This firm had earlier in September sacked a junior lawyer who used to work on Amazon-related matters, according to The Morning Context. The lawyer was aware of the corruption allegations, according to two people familiar with the situation.

However, The Morning Context said it could not independently confirm the circumstances that led to the lawyer’s exit from the company.

An unidentified spokesperson from Amazon told The Morning Context and Reuters that the e-commerce company had “zero tolerance” for corruption.

The spokesperson added: “We take allegations of improper actions seriously, investigate them fully, and take appropriate action. We are not commenting on specific allegations or the status of any investigation at this time.”

One of the unidentified officials who spoke to The Morning Context said that under the American Foreign Corrupt Practices Act, firms are barred from bribing officials abroad. The official added that most US companies, including Amazon, treat such whistleblower complaints seriously.

Traders’ body seeks CBI inquiry

Meanwhile, the Confederation of All India Traders has written to Union Commerce Minister Piyush Goyal seeking a Central Bureau of Investigation inquiry into the bribery allegations, reported NDTV.

The traders’ body said that the allegations are against the Centre’s vision of removing corruption from within the government. It also demanded that the officials involved in the alleged incident be named and punished.

The traders’ body said that it will also approach the United States’ Securities and Exchange Commission seeking an investigation.

National President BC Bhartia and Secretary General Praveen Khandelwal of the Confederation of All India Traders said the inquiry should be conducted to find out whether the alleged bribery has “any connection with the ongoing investigation or related with continuous violation of the law and rules by Amazon”.

They also said the inquiry was needed to protect India’s e-commerce market and retail trade from “undue influence, abuse of dominance and connivance with government officials”.

In January, the Competition Commission of India had ordered an inquiry into allegations that Amazon and another e-commerce company Flipkart promoted selected sellers on their platforms. The inquiry was based on a complaint by traders’ body Delhi Vyapar Mahasangh.

The Delhi Vyapar Mahasangh had said that the e-commerce firms had indirect control of the operations of some vendors they were allegedly giving preferential treatment to, especially in the case of launch of smartphones.

Amazon had first moved the Karnataka High Court against the Competition Commission’s order but the petition was dismissed. The e-commerce platform then moved the Supreme Court. But, on August 9, the Supreme Court had also refused to halt the order.

On the same day of the Supreme Court’s decision, Amazon said it would not to renew its joint venture with Cloudtail, one of its biggest sellers in India, beyond the scheduled end of contract next year. The contract is due to end on May 19, 2022.

Retail sellers in India have alleged that Cloudtail was one of the vendors which received preferential treatment from Amazon.