The Competition Commission of India (CCI) has cleared Amazon’s proposal to acquire Catamaran Ventures’ entire stake in Prione Business Services Pvt. Ltd., the joint venture between Infosys co-founder N R Narayana Murthy’s Catamaran Ventures and the US-based e-commerce giant. Prione Business Services houses Cloudtail, one of the largest retailers on the e-commerce firm’s Indian platform. The CCI said it had approved the transaction in a tweet.
“Commission approves acquisition of Prione Business Services Private Limited by Amazon Asia-Pacific Resources Private Limited,” said CCI in a tweet on Wednesday.
Senior Amazon India executives are expected to hold a meeting on the matter this week, according to the sources.
Last year in December, Amazon had said that Prione Business Services will be acquired by Amazon, subject to the requisite regulatory approvals. On August 09, 2021, the partners had announced their decision to not continue the JV beyond the end of its current term in May 2022.
The businesses of the JV continued under the leadership of the current management and once the regulatory approvals come through, the board of Prione and Cloudtail (owned by Prione) was expected to complete the transaction in compliance with the applicable laws.
The Confederation of All India Traders (CAIT), which represents about 70 million traders in the country came down heavily on the Competition Commission of India (CCI) for dropping investigation against Amazon for violations pertaining to selling private labels on it’s portal. CAIT termed the CCI as a spineless toothless body incapable of discharging duties as an Anti- Trust Regulator. It alleged issues were kept pending for a longer and indefinite period and by that time, the gravity of the issue already caused damage to the affected party. The CAIT has demanded an in-depth study of working of the CCI and remedial measures to make it a more efficient and accountable regulator like TRAI and SEBI.
CAIT National President B.C.Bhartia and Secretary General Praveen Khandelwal said that it is highly unfortunate that the CCI has dropped such an important investigation against law offender Amazon after starting a suo- moto case based on a global news agency’s report which was published on 13th October, 2021 and CCI took Suo- Moto cognisance on 21st October passing an order seeking details from Amazon. They further alleged that the agency report was absolutely unambiguous and crystal clear highlighting how Amazon was pushing it’s own private label business when it is supposed to perform only as a Marketplace as per FDI (foreign direct investment) norms.
“We believe that CCI did not ask the agency to substantiate its charges referred to in its published article and an ex parte order was passed by the CCI which violates the norms of the principle of natural justice,” said Bhartia and Khandelwal. “We are at a loss to understand why the Government and government agencies are keeping a complete silence on the daylight violations of policy, rules and laws by Amazon and others.”
Bhartia and Khandelwal said that the traders of India are extremely perturbed and shocked that time and again, the Indian retail ecosystem has been left vulnerable simply because anti-trust regulator CCI has failed to discharge its duties. They said CCI was supposed to ensure that the interests of all stakeholders must be protected but over the last 5-7 years, foreign multinational giants have steamrolled their way through the Indian market, violating all laws in spirit and creating an unhealthy business environment and CCI has been a mere spectator till date not able to rein in the foreign players. “In a nutshell, the CCI has utterly failed in discharging its obligations of fair judgement,” alleged Bhartia and Khandelwal.
They said it is the Government’s duty to ensure that 80 million traders of India do not perish against the onslaught of foreign e-tail players but so far absolutely no strong measure has been adopted despite several complaints and representations made to the Commerce Ministry at various levels. They said DPIIT (Department for Promotion of Industry and Internal Trade) is primarily responsible for safeguarding India’s internal trade. “But it is a matter of grave concern that Indian traders are fast losing faith in the efficacy of DPIIT as well as there is no sign of early rollout of long-pending e-commerce policy,” said Bhartia and Khandelwal.
The relationship between N R Narayana Murthy and Amazon founder Jeff Bezos goes back to 2014, when Prione, a 49:51 JV, was formed. In 2019, the JV was restructured after the government stipulated that foreign e-commerce marketplaces cannot sell the products of their group companies on their platforms. Following this, Catamaran Ventures increased its stake in Prione to 76 per cent, reducing Amazon Asia’s stake to 24 per cent. A major chunk of Prione’s revenues came from its ownership of Cloudtail, one of the biggest and most profitable retailers on Amazon.
However such partnerships face stiff resistance from local trade associations that perceive Amazon and Flipkart as threats to local retailers and they have alleged preferential treatment to select sellers. They have said that Cloudtail, one of the largest sellers on Amazon India website, is owned by Prione.
Source: Business-Standard