Multiple teams of the Enforcement Directorate Thursday conducted searches at 19 premises of vendors selling their products on e-commerce platforms Amazon and Flipkart. The raids were conducted in Delhi, Bengaluru, Mumbai, Hyderabad and Panchkula. An official said ED decided to initiate its investigation under the provisions of the Foreign Exchange Management Act (FEMA) based on complaints that the e-commerce platforms are violating India’s FDI (foreign direct investment) rules by directly or indirectly influencing the sale price of goods or services and not providing a level playing field to vendors. “On the basis of their complaints, ED made multiple teams and decided to conduct raids after coordinating on Thursday morning,” an official said. A source said the ED examined documents seized during the searches at premises linked to eight vendors, who have not been named so far. When contacted, an Amazon spokesperson declined to comment, while Flipkart did not respond to requests for a comment. Meanwhile, the Confederation of All India Traders (CAIT) welcomed the ED action. “The CAIT, along with several other trade bodies, has been raising these issues for the past few years,” CAIT secretary general and BJP MP from Delhi Praveen Khandelwal said in a statement. He claimed that the Competition Commission of India (CCI) had also issued penalty notices to the e-commerce platforms and their “preferred” sellers for engaging in anti-competitive practices that have adversely affected small traders and kirana stores. The CAIT and mainline mobile retailers' association AIMRA had also petitioned the CCI in the past, seeking immediate suspension of operations of the platforms, alleging that the companies were engaged in predatory pricing and burning cash to offer heavy discounts on products.
