EXCLUSIVE Ex-Amazon India seller says antitrust raid illegally detained employees

  • Amazon sellers raided in April over alleged favoritism
  • Cloudtail Says Antitrust Body Conducted Raid Illegally
  • Antitrust body says raid complied with regulatory process
  • Indian regulators and foreign firms tussle over e-commerce

NEW DELHI, June 10 (Reuters) – A former Amazon (AMZN.O) best seller in India, Cloudtail, has accused India’s antitrust agency of unlawfully detaining its employees during a raid over alleged breaches of the competition law, according to court documents seen by Reuters. .

Cloudtail, among a handful of online sellers raided as part of an investigation into Amazon and Walmart’s (WMT.N) Flipkart over alleged preferential treatment on e-commerce platforms, argued in court that the detentions were the cause of the denial of documents taken during the raid. Read more

“[Three] senior management employees were detained for more than 30 hours overnight until the search and seizure operation was completed,” the May 30 filing said. The operation was carried out on April 28 and 29.

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Cloudtail and Amazon did not respond to requests for comment.

A senior source at the Competition Commission of India (CCI), which led the raid, dismissed the allegations, saying it had obtained the required legal approvals and complied with the watchdog’s regulatory processes. . The source was not authorized to speak to the media and declined to be identified.

Cloudtail’s case marks an escalation between increasingly assertive Indian authorities and foreign e-commerce players who, along with their subsidiaries, dominate the country’s booming online retail sector.

For years, small traders – a key constituency for Prime Minister Narendra Modi – have alleged that foreign giants favored selected sellers online, in violation of Indian laws. The companies deny these allegations.

This is not the only sector where the Indian authorities have recently found themselves in public legal disputes with foreign companies.

In early May, Chinese smartphone maker Xiaomi alleged in a filing that its top executives were threatened with physical violence and coercion during a payment investigation by the Directorate of Law Enforcement, India’s intelligence agency. fight against financial crime. The agency denied the allegations. Read more


An initial hearing on Cloudtail’s case in the Delhi High Court on June 3 did not mention the detentions, and the contents of the case have not been released publicly.

Cloudtail’s attorneys told the judge the company shouldn’t have been raided because it was simply a third-party seller on Amazon.

ICC lawyer Manish Vashisht argued that Cloudtail was simply trying to discourage authorities from pursuing the investigation, noting the watchdog’s broader investigation into Amazon and its dealings with sellers.

The judge scheduled the next hearing on the matter 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 covered by the TCC’s investigation, Cloudtail was controlled by a joint venture between Amazon and an Indian entity.

The two companies announced last August that they would not extend the partnership beyond May 2022, after a Reuters investigation, based on Amazon documents, showed that the American company had given preferential treatment for years to Cloudtail and a small group of other vendors, which they used to circumvent Indian laws. (https://reut.rs/3QcQyYr)

The investigation found that while Amazon publicly referred to Cloudtail as an independent seller offering products on its website, company documents revealed that the US company was deeply involved in its expansion. Amazon said it does not give preferential treatment to any sellers and is complying with the law.

In the latest court filing, Cloudtail also objected to ICC raids for seizing confidential documents, including family photos and blood test results, while his attorneys were barred from entering the premises. nor to assist the employees during the raid.

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Reporting by Aditya Kalra and Abhirup Roy; Editing by Edmund Klamann

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