Cloudtail has accused the Competition Commission of illegally detaining its employees during a raid
NEW DELHI:
A former top seller for Amazon in India, Cloudtail, has accused the Indian antitrust agency of illegally detaining its employees during a raid for alleged antitrust violations, court documents seen by Reuters show.
Cloudtail, one of a handful of online merchants raided in an investigation into Amazon and Walmart’s Flipkart for suspected preferential treatment on e-commerce platforms, argued in a court that the arrests were grounds for disallowing material taken during the raid. .
†[Three] senior management employees were held overnight for more than 30 hours until the completion of the search and seizure,” the file said on May 30. The operation was carried out on April 28 and 29.
Cloudtail and Amazon did not respond to requests for comment.
A leading source at the Competition Commission of India (CCI), which conducted the raid, dismissed the allegations, saying it had obtained the required regulatory approvals and was in compliance with the watchdog’s regulatory processes. The source was not authorized to speak to the media and declined to be identified.
Cloudtail’s filing marks an escalating battle between India’s increasingly assertive authorities and the foreign e-commerce players who, along with their affiliates, dominate the country’s thriving online retail sector.
For years, small traders — a key constituency for Prime Minister Narendra Modi — have claimed that foreign giants prefer select merchants online, in violation of Indian laws. The companies deny those allegations.
Incidentally, this is not the only sector where the Indian authorities have recently become involved in public-law legal squabbles with foreign companies.
In early May, Chinese smartphone maker Xiaomi claimed in a file that its top executives were threatened with physical violence and coercion during an investigation into remittances by the Enforcement Directorate, India’s financial crime agency. The agency denied the allegations.
CONFIRMED DOCUMENTS
An initial hearing on Cloudtail’s submission to the Delhi High Court on June 3 made no mention of the detentions and the contents of the submission have not been made public.
Cloudtail’s lawyers told the judge that the company should not have been raided, as it was just a third-party seller on Amazon.
The CCI attorney, Manish Vashisht, argued that Cloudtail was simply trying to discourage authorities from proceeding with the investigation, noting the watchdog’s wider investigation into Amazon and its relationships with sellers.
The judge has scheduled the next hearing on the case for July 15.
Amazon recently took full control of Cloudtail, which has since ceased to be a seller on the Amazon platform.
During the period examined by CCI, Cloudtail was controlled by a joint venture between Amazon and an Indian entity.
The two companies announced last August that they would not extend their partnership beyond May 2022 after a Reuters investigation, based on Amazon documents, found that the US company had given preferential treatment to Cloudtail and a small group of other sellers for years. , which they used. circumvent Indian laws.
The investigation found that while Amazon publicly referred to Cloudtail as an independent seller offering goods on its website, company records indicated that the US company was deeply involved in its expansion. Amazon has said it does not give preferential treatment to any seller and that it follows the law.
In the latest lawsuit, Cloudtail also objected to the CCI raids for seizing confidential documents, including family photos and blood test results, while barring its lawyers from entering the property or helping employees during the raid.
(Except for the headline, this story has not been edited by DailyExpertNews staff and has been published from a syndicated feed.)
