New Delhi/IBNS: Amazon has sought regulatory approval to acquire acquire Catamaran Venture’s entire stake in Prione Business Services, which owns Cloudtail, one of the largest sellers on the US-based ecommerce major’s Indian platform, Economic Times reported.
“Amazon has made a filing with the Competition Commission of India (CCI) forapproval to buy Catamaran's stake that will give it 100% ownership in Prione,” a person aware of the matter told ET.
Prione Business Services, is a joint venture between Narayan Murthy-led Catamaran and Amazon. Cloudtail India is Prione's wholly-owned subsidiary and is one of Amazon's largest sellers in the country.
On December 22, Catamaran and Amazon said: "Amazon will acquire Catamaran’s shareholding in Prione in compliance with applicable laws including all assets and liabilities," the two companies said in a joint statement on December 22."
Cloudtail India has repeatedly come under the radar for alleged violation of Foreign Direct Investment (FDI) norms.
On August 9 this year, Amazon and Catamaran announced their decision to not continue the joint venture after May 2022 when its current term also ends.
This decision came after the Supreme Court's order allowing the Competition Commission of India (CCI) to start a probe into the alleged anti-competitive practices of Amazon.
Cloudtail will continue as a seller on Amazon for now, but it wasn't immediately clear if it could continue to sell products on Amazon as after this acquisition it will fall under the e-commerce rules that prohibit marketplaces from possessing any ownership in the firms run by their sellers.
In India, e-tailers are known to be having a set of preferred vendors who get a majority of the business generated by these companies.
In 2018, the government had come up with Press Note 2, revising the then-existing Press Note 3. It asked the marketplaces to ensure that they will not sell the products of their group companies on their platforms.