Traders’ body Confederation of All India Traders (CAIT) in a communication to the competition regulator Competition Commission of India has accused e-commerce company Amazon of using “dark pattern practices and anti-competitive practices against consumers at large.” CAIT said it was recently reported that Amazon has been indulging in dark pattern practices by knowingly forcing consumers to subscribe to its Prime membership and making it next to impossible to cancel the same.
CAIT National President B C Bhartia and Secretary General Praveen Khandelwal in a statement said that it has come to know that the Federal Trade Commission (FTC) of the US is in the process of filing a comprehensive suit against Amazon for misusing its market power to selectively favour some sellers over others, the same way it has been doing in India since it began its e-commerce platform in 2013. “The FTC has alleged that Amazon has been misusing its market power to reward merchants that use its logistics and delivery services and punish those who don’t use these services.”
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FTC in a press release issued last month had said that it is taking action against Amazon.com, Inc. for its years-long effort to enroll consumers into its Prime programme without their consent while knowingly making it difficult for consumers to cancel their subscriptions to Prime. “Amazon tricked and trapped people into recurring subscriptions without their consent, not only frustrating users but also costing them significant money,” said FTC Chair Lina M. Khan in the statement.
Bhartia and Khandelwal pointed out that there are multiple investigations pending against Amazon before the Enforcement Directorate and the CCI for violation of the FDI Policy and Competition Law framework of India. “The CAIT, therefore has urged CCI to pass directions to expedite the pending investigation of the CCI and to suspend operations of Amazon in India till all ongoing investigations are concluded.”
The trade body leaders also alleged that the fee charged by Amazon for its logistics and delivery services are in addition to other platform fee such as expenses on advertising, warehousing and fixed costs etc., charged from sellers.
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According to Bhartia and Khandelwal, FTC has also alleged that Amazon’s algorithm to choose the best sellers for its “Buy-Box” is rigged and that it will launch an investigation into the algorithm as well. The Buy Box feature allows consumers to add products directly to their carts.
“They strongly said that such practices are similar to Amazon’s practices in India where it has been favouring a few preferred/controlled/related sellers and service providers at the cost of smaller independent sellers and service providers.”
CAIT also accused Amazon of deep discounting of products for preferred sellers, predatory pricing by preferred sellers, funding losses of preferred sellers and service providers, charging no/nominal platform fee from such sellers and providing the best advertising space.