Cloudatail denies controlling links with Amazon, opposes CCI raid
New Delhi: E-commerce seller Cloudtail India has challenged the CCI's April 28 raid on its premises, saying that Amazon has no controlling interest in it and the vendor cannot be linked to a case that was against the e-commerce platforms.
However, CCI has taken the stance that Amazon was a shareholder in the company when the CCI first ordered a probe in 2020, implying that Amazon and Cloudtail were linked, according to an ET report.
Cloudtail used to account for 40 percent of the sale on Amazon but the latter discontinued exited the venture after CCI's intervention.
Cloudtail was started as a joint venture between Amazon and Infosys founder NR Narayana Murthy-backed
“The holding structure of Cloudtail as on 28 April 2022, when the search was conducted, Amazon did not have any controlling interest in Cloudtail,” ET quoted a person with direct knowledge of the matter.
“However, the CCI has been taking a position that when the commission originally ordered the investigation (January 2020), Amazon had a significant stake in Cloudtail and hence the commission was within its purview to conduct such raids.”
ET reported that citing people with knowledge of the matter that "through a web of corporate restructuring, Amazon gave up its stake in Cloudtail India even as simultaneously it acquired 100 percent of the parent company of Cloudtail, Prione Business Solutions. Cloudtail is no longer an active eCommerce vendor."
The CCI initiated the probe after receiving complaints over alleged abuse of market dominance by leading eCommerce companies like Amazon.
It has been alleged that the vendors, heavily promoted on these platforms, were actually owned by these ecommerce platforms partially or fully.
The Indian laws don't allow foreign-owned platforms to sell on their own. These companies can, however, run online marketplace for other sellers.
Amazon owned a 49 percent stake in Prione until 2019, but was brought down to 29 percent after set an FDI limit in the ecommerce retail businesses.