The government can issue summons to e-commerce platforms Amazon and Flipkart for questioning. Reuters quoted sources as saying that the government will issue summons to the officials of these companies as part of the investigation into violations of the Foreign Investment Law.
Recently, the Enforcement Directorate (ED) raided some sellers associated with these companies. It is alleged that companies control the inventory (stock) through some selected sellers.
After the raid on sellers of Amazon and Flipkart last week, ED is now preparing to call company officials. ED is also examining the documents found during the raid.
Foreign e-commerce platforms can act as marketplaces
As per Indian regulations, foreign e-commerce platforms cannot hold inventory in India, they can only operate as online marketplaces.
In India's $70 billion (about Rs 5.91 lakh crore) e-commerce market, the sales of Amazon and Flipkart are increasing rapidly.
According to Datum Intelligence, last year Flipkart had 32% market share and Amazon had 24% market share in the Indian e-commerce sector.
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Zomato-Swiggy termed the news of violation of competition norms as misleading: Companies said- they are committed to following the competition law.
Food Delivery platforms Zomato and Swiggy have termed the news of violation of competition norms as misleading. Recently, it was said in media reports that the Competition Commission of India i.e. CCI has found Zomato and Swiggy guilty of violating competition norms i.e. competition laws.
Graphics Source: NavJivanIndia | VaskarAssets
