'Nothing Wrong In Lowering Fees For Sellers': Flipkart Defends Product Price Cut

India's e-commerce company Flipkart has made a surprising statement regarding duty cut for sellers on its platform. Flipkart says that it sees nothing wrong in offering to cut fees for sellers on its platform.

Flipkart Logo | File Image

India's e-commerce company Flipkart has made a big statement regarding duty reduction for sellers on its platform. During a hearing in the court, the counsel representing Flipkart said: "It sees nothing wrong in offering to cut fees for sellers on its platform provided they reduce the prices of the product."

Flipkart is currently facing allegations of Indian retailers for flouting various norms. Flipkart and Amazon are in a court battle against the Competition Commission of India's bid to restart an investigation into their business practices.

Both Flipkart and Amazon have been battling allegations from Indian retailers for years. Flipkart and Amazon are accused of bypassing the foreign investment law in favor of some sellers and influencing the prices of the products. Despite the allegations, the companies claim to follow all the laws of the Indian market.

Appearing in the court, Flipkart's counsel Harish Salve told a two-judge bench in Karnataka that he does not find anything wrong in telling the sellers of Flipkart that they will be charged a lesser fee if they reduce the prices of their products on Flipkart.

He was referring to the Hindu festival Diwali in particular when websites organize various sale events and give great offers. Advocate Harish Salve said, "I tell my vendors at times like Diwali that if you reduce your prices, I will give you a reduction in rent. What's wrong with that?"

This argument made by Flipkart has been criticized by the Confederation of All India Traders. This association is in favor of the ongoing litigation against the e-commerce giants.

On behalf of this consortium, it has been said that the practices by these companies were prohibited under the Foreign Direct Investment (FDI) rules. CAIT Secretary General Praveen Khandelwal said that the arguments made by Flipkart in the court clearly corroborate the repeated views and complaints made by CAIT. According to him the market, which represents 80 million retail stores in the country, should not affect the prices.

He said that India's foreign investment law for e-commerce states, "the entities providing the marketplace shall not directly or indirectly influence the selling price of the goods or services".

An investigation in February, based on internal Amazon documents, showed that US companies have also been favouring a small group of sellers for many years. US companies have given preferential treatment to some sellers by offering concessions and reducing the platform fees so that they sell their products a competitive prices.

Amazon has said that it does not favour any seller, and the prices are decided by the sellers.