Updated: August 10, 2021 10:16:12 am
Amazon and Infosys founder NR Naryana Murthy-owned Catamaran Ventures have decided to discontinue their joint-venture partnership for Prione Business Services — the parent company of Cloudtail India, one of Amazon India’s biggest sellers.
“Prione Business Services Pvt. Ltd, the joint venture between Amazon and Catamaran, has been running successfully for the past 7 years and comes up for renewal on May 19, 2022. The two partners today announced they have mutually decided to not continue their joint venture beyond the end of its current term,” Amazon and Catamaran said in a joint statement.
The announcement came on Monday, hours after the Supreme Court rejected a plea by Amazon and Flipkart seeking a stay on a probe by the Competition Commission of India (CCI) into their business practices, paving the way for the antitrust regulator to look into various allegations levelled by traders and sellers on these platforms. For years, sellers on platforms like Amazon and Flipkart have been complaining the preferential treatment provided to certain large sellers on these marketplaces, particularly the ones that have a relationship with the platforms.
Responding to a specific query by The Indian Express on the reason of the decision, an Amazon India spokesperson said: “Both the partners believe that the primary business objectives of the JV have been fulfilled. Hence, the JV partners have decided to not renew the JV.” Further, when asked about the next course of action, the spokesperson said: “Catamaran and Amazon have mutually agreed to not renew the JV and partners will decide the next steps.”
In addition to Cloudtail, Amazon also has a partnership with the Patni Group, through which it operates another major seller on its platform Appario Retail. In February 2019, following the industry department issuing the Press Note 2, asking online marketplaces with foreign investment to not have relationship with sellers on their platforms, Amazon had reduced its stake in Prione Business Services to 24 per cent from 49 per cent earlier. Catamaran’s stake in Prione then rose to 76 per cent from 51 per cent. At the same time, Amazon had also reduced its stake in the Appario Retail JV to 24 per cent.
“Amazon and Catamaran entered into a JV in the early days of e-commerce in India with a shared vision of transforming hundreds of thousands of small businesses in a fast-changing digital world, by providing online capabilities enabling them to access customers both in India and globally,” Amit Agarwal, global senior VP and country head-Amazon India, said.
In June, the Consumer Affairs Ministry had announced draft amendments to the Consumer Protection (E-commerce) Rules, significantly tightening the rules for online marketplaces. Shortly after the announcement of the draft amendments, Commerce and Consumer Affairs Minister Piyush Goyal had reprimanded e-commerce firms for “forum shopping” to delay sharing information with the CCI. “A number of these large e-commerce companies have come into India and very blatantly flouted the laws of the land in more ways than one…I’ve had several engagements with these large companies, particularly the American ones, and I can see a little bit of arrogance,” he had said.
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