Reuters dishes on Amazon’s India problems

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Amazon earnings

Newly leaked Amazon documents reviewed by Reuters tell a tale of manipulation, gaslighting and deceit in international affairs, specifically, in the Indian market, where government officials have been critical of business practices by the global retailer.

 

Following internal memos and their effect on the activities of figures like Jay Carney, who went from the Obama administration to Amazon’s payroll in recent years, a special Reuters report built on the documents talks about how Amazon has been less than forthright about how it does business in India.

 

Curiously, the report does not go into detail about how the documents were acquired. Leading with an anecdote about Carney meeting with Indian officials, the report notes that Reuters is looking at these documents “for the first time” and then launches into what reporters are calling a “cat and mouse game” between Amazon and the Indian government.

 

The gist of some of the accusations against Amazon are claims that although Amazon can’t sell directly in India like it can in the US, it uses a network of less than 50 sellers to control two thirds of all sales within the country.

 

Then, researchers allege, Amazon has been able to hide these numbers, and essentially “shifts” its corporate strategy according to changes in national law, to stymie restrictions and defensive actions by Indian officials including Narendra Modi, which reporters reveal Amazon described in internal documentation as “not intellectual.”

 

The extensive detail in the report looks pretty bad for Amazon, although the company has responded to questions saying that Amazon “has always complied with the law.”

 

Despite all of this, reporters say, the Indian government is still trying to make concessions to many small retailers in India who claim that Amazon has been freezing them out for years.

“With a national election looming in April 2019, the Modi government …announced new restrictions that prohibited vendors in which marketplaces such as Amazon have an equity interest from selling products on these marketplaces,” writes Aditya Kalra. “The aim, government officials told Reuters at the time, was to deter deep discounting by big online retailers. The new limits forced Amazon to restructure its relationships with Cloudtail and Appario, the two special merchants in which it held indirect stakes. As company documents showed, the two then accounted for around 35% of Amazon’s online sales. The regulatory change was widely seen in India as a move by Modi to pacify small traders, a critical part of his party’s electoral base.”

Stay focused on what’s happening with Amazon, as the company continues to accumulate scrutiny around the world.

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