JODHPUR: The Rajasthan High Court has issued notice to the Central government seeking reply on the violation
of FDI rules by e-commerce giants like Amazon, Flipkart and Paytm.
A liberty has also been granted to the petitioner’s counsel to send the notices to these e-commerce companies by email.
Confederation of All India Traders Association has moved a petition in the high court accusing the e-commerce sites of working in contravention of the FDI rules and promoting loss funding with a view to capture the market.
“These companies have resorted to unethical trade practices and have resorted to loss funding by giving discounts extending up to 90% with a view to capture the market,” argued petitioner’s counsel Rajvendra Saraswat.
He further argued that there are two types of violations these e-commerce companies are committing in their online selling practices.
“One is that you can’t have a pre-determined price of any product while selling and the other is you can’t have ownership of the inventory,” Sarswat said adding that most of the goods they are selling belong to their own companies. The petitioner association has also stated in its petition that this selling ecosystem by these companies has harmed the domestic market as right from big discounts, these companies are not only providing free delivery but also an option of return of the product.
Sharing some statistics of the e-commerce companies, Saraswat said that these companies had borne a loss of a whopping sum of Rs 7,500 crore last year but in order to take control of the market, these companies have deliberately been bearing this loss.
While quoting some examples, the petitioner stated that the objective of these companies is to destroy the domestic market by way of loss bearing and then enjoy a monopolistic market. Admitting petition, Justice Dinesh Mehta issued notice to the Centre and has listed the matter for hearing on October 14.
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