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CAIT moves CCI seeking to block Amazon-Cloudtail deal

CAIT moves CCI seeking to block Amazon-Cloudtail deal

Amazon had announced last month that it is awaiting approval from the competition watchdog for 100 percent acquisition of Cloudtail, the top seller on the online marketplace

Traders body, Confederation of All India Traders has filed a petition before the Competition Commision of India seeking to block acuisition of Cloudtail India by Amazon Traders body, Confederation of All India Traders has filed a petition before the Competition Commision of India seeking to block acuisition of Cloudtail India by Amazon

In a new twist to the ongoing battle between the traders' body Confederation of All Indian Traders (CAIT) and e-commerce giant Amazon, CAIT has filed a fresh petition before the Competition Commission of India (CCI), seeking to block the acquisition of Cloudtail India by Amazon. Amazon had announced last month that it is awaiting approval from the competition watchdog for 100 percent acquisition of Cloudtail, the top seller on the online marketplace.

 
CAIT meanwhile stated that the petition has been filed through its lawyer Abir Roy of law firm Sarvada Legal, providing instances wherein Amazon gives preference to Cloudtail and such preference will only become more pronounced after this transaction, which would have a destabilising effect on the e-commerce market in India.
 
“The petition provides evidence to show Cloudtail charges less fees / commission and is a preferential seller on the platform, and with a 100 percent acquisition of Cloudtail, a preferred seller and the marketplace at its e-commerce portal, Amazon will cause an adverse effect on the market," CAIT said in a statement.

The traders' body further argued that a marketplace like Amazon is supposed to be "fair and neutral and, as per rules, be purely a technology providing forum for conducting e-commerce activities."

"This transaction is not only in violation of competition law but is also a violation of FDI norms too,” it added.
 
Cloudtail, in which Amazon holds 24 per cent stake, along with N.R. Narayana Murthy’s private investment firm Catamaran Ventures, which holds 76 per cent, saw net profit rise by 171 per cent year-on-year to Rs 183 crore in FY21.

It also has Amazon India head, Amit Agarwal as its board member. After the scrutiny from regulators and the government, Amazon and Catamaran Ventures recently announced that Cloudtail India will cease operations from May 2022.

The e-tailer has now sought approval from the CCI for the acquisition of the 76 percent stake held by Narayana Murthy’s family office, Catamaran Ventures in Cloudtail India.

“Amazon will acquire Catamaran’s shareholding in Prione [the name of the joint venture] in compliance with applicable laws, including all assets and liabilities.  The businesses of the joint venture shall continue under the leadership of the current management and on receipt of regulatory approvals, the board of Prione & Cloudtail will take steps to complete the transaction in compliance with applicable laws,”  a joint statement by Amazon India and Catamaran Ventures had said.