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ISC urges Murthy to support probe against Amazon

In 2014, Narayana Murthy’s Catamaran and Amazon had formed a JV, Prione Business Services. but decided not to continue the JV beyond May 2022, making the Indian Sellers Collective happy

The Indian Sellers Collective (ISC), a trade association of micro and small enterprises and family businesses, urged information technology veteran NR Narayana Murthy on Wednesday to cooperate in the Competition Commission of India’s antitrust probe against Amazon for alleged anti-competitive practices.

In 2014, Murthy’s Catamaran and Amazon had formed a joint venture, Prione Business Services. On 9 August, the partners announced that they have mutually decided not to continue the JV beyond May 2022.

ISC thanked Murthy for deciding to end the joint venture with Amazon.

In an open letter to Murthy, ISC urged that the Rs 5,856.45 crore margins/profit out of the Rs 39,043 crore revenue that Cloudtail earned between FY14 and FY20 and which was allegedly taken away from small sellers and retailers, should be deposited in the Small Sellers Covid Relief fund.

The Prione Business Services JV is coming up for renewal on 19 May 2022. Cloudtail, which is the largest seller on Amazon India, is a wholly-owned subsidiary of Prione.

The Supreme Court has refused to entertain the pleas of Amazon and rival Flipkart against CCI’s into alleged violations of the competition laws.

“Mr Murthy’s decision to walk out of the joint venture is a step in the right direction. It will boost our fight against erring e-commerce marketplaces that have little regard for the law of the land. He should now set a precedent for the future by extending all support to the Competition Commission of India which is probing the unethical practices of Amazon,” Abhay Raj Mishra, President of Public Response Against Helplessness and Action for Redressal (PRAHAR) and member of ISC, said.

ISC is an umbrella union of associations like PRAHAR, All India Online Vendors Association (AIOVA), All India Consumer Products Distributors Federation (AICPDF), All India Mobile Retailers Association (AIMRA) and Federation of All India Distributors Associations (FAIDA).

Emails sent to Catamaran and Murthy did not elicit any response.

Amazon and Catamaran have not disclosed the reason behind their decision. Prione has enabled over 3 lakh sellers and entrepreneurs to go online and helped 4 million merchants with digital capabilities. The partners did not clarify if Cloudtail would shut down operations.

Reports suggest that Catamaran could look at buying Amazon’s stake in Cloudtail, but the companies have not commented on the same.

In its open letter to Murthy on 11 August, ISC appealed to the Infosys co-founder to “join the cause of ten crore retailers whose livelihood depends on their small shops and micro establishments.”

The letter urged him to cooperate in the CCI’s antitrust probe against Amazon for alleged anti-competitive practices, and said this is the opportunity for him “to correct the historical wrong that Amazon has inflicted on the country’s small retailers.”

The letter further highlighted that as the principal seller on Amazon, Cloudtail had earned a total of Rs 39,043 crore between FY14 and FY20. It urged that the margins/profit from this sale, which amounts to Rs 5856.45 crore, be deposited in the Small Sellers Covid-19 Relief Fund.

An AIOVA spokesperson said Amazon and Murthy together “owe repatriation to sellers for the fee provided to certain sellers at the cost of other sellers. They should correct this historical wrong inflicted on sellers by depositing the profit earned by Cloudtail India between FY14 to FY20 to the Small Sellers Covid Relief fund.”

“The Fund supports families of small sellers and retailers, who have either lost their sole earning member during the pandemic or have been ravaged by the deep discounting tactics of Amazon,” the letter said.

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