Amazon is ending its relationship with Cloudtail, one of the platform’s largest sellers in India. The decision comes amidst an antitrust probe into Amazon-Cloudtail relations. Following a document leak by Reuters, the Competition Commission of India recently started an antitrust probe into Amazon and Flipkart.
A joint statement from Amazon and Cloudtail controller Catamaran announced the development. Amazon-Cloudtail relations were due for renewal in May 2022, and both parties decided not to renew the deal. This means the seller will no longer be selling on Amazon in 2022. However, its removal from Amazon isn’t likely to impact the ongoing case against the platform.
According to Reuters documents, the e-commerce platform has been flouting Indian foreign direct investment (FDI) rules by investing in the creation of a “special merchant.” This special merchant is Cloudtail. While Amazon can be a platform for e-commerce in India, it isn’t allowed to control the inventory.
However, with the creation of this special seller, Amazon has been indirectly controlling the inventory, favoring its own seller over other sellers. The Competition Commission of India also issued a report with multiple complaints from e-commerce sellers, pointing to preferential treatment of Cloudtail.