Amazon has announced it is splitting from one of its biggest sellers in India, Cloudtail.
The news comes after a Reuters investigation in February found that Amazon gave preferential treatment to a small group of sellers, including Cloudtail, which the company would use to circumvent Indian laws.
While the joint venture between Amazon and India’s Catamaran, which controls Cloudtail, was due to be renewed on May 19, 2022, the two companies said in a joint statement that they would not extend the mutual contract beyond that date and refused to explain why they had decided to terminate their joint venture.
Arvind Singhal, chairman of retail consultancy Technopak Advisors, said recent actions by Amazon and Catamaran were only intended to protect them from possible future scrutiny.
He said: ‘Before it comes under more scrutiny, they are basically disengaging themselves. But given the relationship has been there for years, this will still hang as a sword on their heads.”
Amazon is also in talks with the parent company Appario, another company that is accused of giving preferential treatment, to determine whether to renew its joint venture next year.
India is a key growth market for Amazon, where it has pledged $6.5 billion in investment but also faces several regulatory challenges, including stricter laws that apply to foreign e-commerce giants.
For more information, read the original story in Reuters.