Cloudtail has declared that because Amazon does not hold an interest in the business The seller shouldn’t be linked to the probe by the e-commerce giant
The move is made despite the fact that Cloudtail does not remain a seller and is looking to close its business
CCI was able to raise Cloudtail (and Appario Retail, as well as Appario Retail,) on April 20, 2022 in protest of alleged discrimination by the e-commerce giants they sell on
Etailer Cloudtail is a JV formed with Amazon as well as Catamaran Ventures has raised doubts about the legitimacy in the CCI raids that are being conducted at its premises in April 2022. Cloudtail has claimed that because Amazon has ceased to hold an ownership stake in the business, there’s no way to CCI to inquire into the latter’s activities while conducting an investigation into Amazon.
In the ET story, Cloudtail argued that Amazon does not control it anymore. However, CCI has been reportedly probing the company for transactions while Amazon held a stake and CCI had originally ordered an investigation in the year 2020. CCI asserts the investigation was initiated in 2020. Cloudtail as well as Amazon were connected at the time.
CCI has taken an argument that when the commission first initiated an investigation (January 2020), Amazon had a significant stake in Cloudtail and, therefore, the commission had the authority to conduct these raids, the report added.
The move takes place despite the online retailer has ceased to be an active seller and is looking to shut down its operations.
Noteworthy, CCI was in locations of the largest Indian online sellers, including Amazon’s former most popular seller Cloudtail as well as Appario Retail and some top sellers from Flipkart and Meesho.
Although the precise nature of the alleged breach was not yet clear, CCI seized some important financial documents from Cloudtail and Appario and suggested that there were financial transactions and links with Amazon with its top sellers.
In the case of Amazon, CCI has alleged that the online retailer is eroding its market power through a variety of ways, such as advertising preferred brands and using deep discounting strategies and creating fake competition.
The Cloud that Tails the Cloudtail
The e-commerce majors Amazon and Flipkart are under surveillance of the government since 2020, when the CCI initiated an investigation into the alleged anti-competitive practices of the companies and favoritism of sellers. For Cloudtail the company, scandals and announcements have been a constant source of concern for the company for a long time and especially since 2022 was the start of it all.
In the beginning when Amazon has given up its stake in Cloudtail and proposed to buy 100% of the Cataraman-owned Prione (the Cloudtail parent). The acquisition that was approved by the CCI has not received a favorable response from small sellers and tradersacross the nation.
Then, in April of 2022 CCI took over the Cloudtail offices and confiscated a number of Financial documents that were seized from their offices. Many online vendors, including Cloudtail later made an appeal to CCI and the Delhi High Court against the raids. Cloudtail has claimed that it is an online seller through Amazon and therefore it shouldn’t have been targeted.
It also claimed CCI of being detained by three CCI employees and interrogating them for more than 30 minutes.
The courts have been in favor of CCI and permitted an authority to monitor competition to go forward with its investigation against the e-commerce giants, which includes Cloudtail.
Then, in May of 2022 the CCI examined the documents seized by CCI and found that financial transactions took place between Amazon and Cloudtail, one of its preferred sellers. Both Amazon as well as Cloudtail are also subject to criticism for their claims of preferential treatment to Cloudtail (and the Amazon-Patni JV Appario Retail).
In addition, the etailer will close its doors soon and has issued notices of termination to its suppliers, which has caused fear among small-scale sellers who have stock for Cloudtail. Cloudtail plans to sell or liquidate its remaining inventory, which includes products that it purchases by you it had stated in an email sent to vendors.