The Competition Commission of India (CCI) raided the offices of alpha sellers on popular ecommerce platforms today morning. The confirmed sellers whose offices were raided were Cloudtail and Appario Retail, both large sellers on Amazon. In addition, it was reported that the offices of alpha sellers on Flipkart and Meesho were also raided.
According to Economic Times, legal experts see this as the first instance of a CCI raid against vertical agreements. These agreements are when a large player, such as an ecommerce platform, enters into agreements with select sellers, giving them an advantage over the market.
Cloudtail was launched in a joint venture by Amazon and NRN Murthy’s Catamaran Ventures in 2014. In 2019, Amazon was forced to dilute their ownership of the Cloudtail in response to regulatory changes regarding these types of vertical agreements. However, earlier this year, it was reported that Catamaran would be selling their stake in Cloudtail’s parent company Prione Business to Amazon, although details are still undeclared.
A former CCI official told Reuters that these raids were a departure from normal procedure for the regulator.
“This is a significant development as generally, CCI doesn’t do searches in non-cartel cases,” they said. “Doing dawn raids to unearth complex economic activities is a new domain for the regulator.”
