US Defends Amazon After Reports It Circumvented Indian Laws, Retail News, ET Retail


New Delhi: US officials rushed to defend Amazon’s business practices in India after Reuters reported in February that the company had favored certain sellers on its website and circumvented local law that requires foreign e-commerce companies to treat all sellers the same way, according to documents obtained by the news agency.

Emails obtained through the U.S. Freedom of Information Act from the Office of the U.S. Trade Representative (USTR) showed that U.S. officials prepared a memo for John Kerry, a top envoy to President Joe Biden, about the Reuters report of February 17. The note, contained in an email dated February 18, said India’s antitrust watchdog had reviewed numerous such allegations against US e-commerce companies and found nothing wrong.

Biden’s envoy, former US Secretary of State Kerry, is in charge of climate change policy. He was to meet that day with the Indian Minister of Commerce, Piyush Goyal. The US government was concerned that Goyal would bring up the Reuters story, so he hastily wrote a note on the story in case he did, the emails show.

“It could show up in the call since, as you know, Minister Goyal is prone to touch on tangential topics,” Thomas Carnegie, an official at the US Embassy in New Delhi, wrote to a USTR official. .

Philip M. Ingeneri, another US Embassy official, also told the USTR official in a Feb. 18 email that he “verified” the contents of the memo prepared for Kerry with Amazon India’s head of government affairs as “truthful and accurate”. The emails do not describe what ultimately happened during the Kerry-Goyal call.

The US Embassy in New Delhi has questioned the US State Department in Washington, which said it expects any issues regarding the practices of US e-commerce companies in India to be investigated. by the Competition Commission of India (CCI) “with the same level of independence, transparency and professionalism that it has demonstrated in the past.

Spokespersons for Kerry, USTR and Goyal did not respond to questions from Reuters.

Reuters report http://reut.rs/2OCOT2W in February, based on internal Amazon documents, found that the US company has for years given preferential treatment to a small group of sellers on its Indian platform, circumventing the country’s strict rules on foreign investment. which aim to protect small traditional Indian retailers.

The article sparked weeks of controversy in India, prompting calls from merchants to ban Amazon. The CCI said in March that the story corroborated evidence it had received against Amazon, while the Law Enforcement Directorate, India’s financial crime agency, asked Amazon for information. and documents related to the company’s Indian operations, Reuters reported. The ICC enforces the antitrust laws of India.

“SENSATIONAL LANGUAGE”

In a March 16 email to U.S. officials, including the USTR office, Ingeneri wrote, in an apparent reference to the February story, that a Reuters reporter had used “sensationalistic language and relied on “pre-2018 Amazon activity that was aggressive but not illegal at the time.” The following sentence of the email has been redacted.

In response to questions from Reuters, a spokeswoman for Amazon India said the company had no comment.

Amazon previously told Reuters it “does not give preferential treatment to any seller in its marketplace” and that it “treats all sellers fairly, transparently and non-discriminatoryly.”

But internal Amazon documents show the e-commerce giant has cut fees to some sellers on its platform, and that a few dozen of Amazon’s more than 400,000 sellers at the start of 2019 accounted for around two-thirds of sales. online e-commerce site.

The memo prepared for Kerry summarized the findings of the Reuters article. Among them: This senior Amazon executive, Jay Carney, had been advised by colleagues in 2019 not to disclose to India’s ambassador in Washington that two sellers on Amazon’s Indian website accounted for a large part of its sales. Amazon has indirect equity interests in these sellers.

From 2009 to 2011, Carney served as President Biden’s communications director when Biden was vice president, before becoming President Barack Obama’s press secretary. Kerry’s memo identified Carney as “Amazon’s senior vice president and former Obama administration spokesman.”

Carney had no comment on the article, the Amazon spokeswoman said.

Under the heading “If Asked: Alleged Amazon E-Commerce Violations”, the memo read: “We have seen a Reuters report from February 17 raising concerns about the practices of US e-commerce companies in India and note that many of the allegations were previously reviewed by the Competition Commission of India without any negative findings.” The email containing the note was marked “SENSITIVE BUT UNCLASSIFIED”.

“The Reuters article repeated earlier allegations made by small traders,” the note said. The partially redacted memo also stated that “Since 2013, Amazon has invested over $5.5 billion in India, employs 100,000 Indians and supports 400,000 vendors in its marketplace.”

India’s strict foreign investment rules for e-commerce have caused friction between Washington and New Delhi and frustrated US companies with online operations in India, such as Amazon and Walmart Inc.

The CCI in January 2020 launched an investigation into Amazon over allegations that it favored certain sellers, but the investigation was put on hold as the company filed a lawsuit. A separate antitrust complaint filed by a group of online sellers against Amazon is currently pending review by the ICC.

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