May 28, 2019
By Aditya Kalra
NEW DELHI (Reuters) – Amazon.com Inc and Walmart Inc’s Flipkart are unlikely to fully participate in an Indian antitrust body’s study of the e-commerce sector for fear of revealing trade secrets, two people with direct knowledge of the matter said.
The Competition Commission of India (CCI) is engaged in what it describes as a “fact-finding exercise” aimed at better understanding the e-commerce sector, showed a document distributed to several e-commerce firms and reviewed by Reuters.
The CCI document features 88 questions over 12 pages requesting recipients volunteer pricing strategies, product information and the identities of their biggest-selling vendors.
Amazon and Flipkart are among India’s largest e-commerce companies so their participation in any such survey could carry significant weight. Yet the pair are unlikely to answer questions in full as doing so would involve disclosing commercially sensitive information, the two people told Reuters.
“This survey is very detailed,” said one of the people, who declined to be identified as they were not authorized to speak publicly on the matter. “Companies are worried because these are competitive, confidential things which are business critical.”
Amazon, Flipkart and the CCI did not respond to Reuters requests for comment.
CCI’s study comes about four months after the government implemented new rules regulating foreign investment in e-commerce, including barring the sale of products on their platforms from vendors in which they have an equity interest. [nL3N1ZV4WU]
The rules saw scores of products vanish from Amazon’s Indian website overnight, and shocked Walmart which just months earlier had bought the majority of Flipkart for $16 billion in the U.S. retailer’s biggest-ever acquisition.
U.S. officials and e-commerce companies have protested the rules, which were widely seen as aimed at winning the support of small traders ahead of a general election. The incumbent government won the election this month by a landslide.
To better understand the e-commerce sector, the CCI in its document asks companies basic details such as the number of employees, but asks online marketplace operators more sensitive questions such as how they charge vendors on their platforms.
It also asks questions regarding contractual agreements struck between e-commerce companies and vendors.
There is no indication of compulsory participation in the survey, with the CCI in the document saying it “does not form a part of any investigation and/or inquiry in any of the proceedings pending” before the watchdog.
(Reporting by Aditya Kalra; Additional reporting by Sankalp Phartiyal; Editing by Martin Howell and Christopher Cushing)