ED raids multiple Amazon-Flipkart vendors across India
NEW DELHI: In a major enforcement action, the Enforcement Directorate (ED) carried out searches at places across the country on Thursday, targeting the vendors of India’s two leading e-commerce platforms, Amazon and Flipkart. They are the ones facing an ongoing investigation into money laundering activities in the e-commerce sector.
As per sources, the ED is operating against this financial impropriety detected in certain vendors who are accused of using such platforms to launder and hide ill-gotten gains. Raids have been conducted at various locations of vendors along with the subsidiary offices of Amazon and Flipkart at crucial cities like Delhi, Mumbai, Hyderabad, and Bengaluru. These searches are part of an investigation under the Prevention of Money Laundering Act, as the ED is struggling to find financial links between third-party vendors and an otherwise spotless picture.
The ED reportedly is investigating the vendors, who allegedly made undue use of e-commerce platforms for money laundering. The ED is collecting key evidence on transactions and examining the vendor deals to find anomalies in alleged activities, which may give the impression of a habitual breach through which monies are laundered.
Whereas in earlier times the regulatory scrutiny of Amazon and Flipkart was against their business practices, this probe very clearly is targeting the activities of the vendors directly. As of now, the companies have made no public comment about the issue. The probe marks India’s growing focus on making e-commerce practices transparent, particularly as the sectors grow to massive influence within the national economy. By targeting third-party sellers, the ED would be targeting perceived and potential gaps in accountability that could be exploited for unlawful financial operations.
The present probe follows several recent revelations by the Competition Commission of India (CCI), which have studied the activities of Amazon and Flipkart pertaining to the market competition. An earlier CCI report this year revealed that both companies allegedly gave preferential treatment to certain vendors with whom the business had close relations, thereby enjoying ranking and visibility benefits on such platforms. This created an imbalanced playing field, prejudiced other vendors, and affected competition in the online marketplace.
