E-commerce giants Flipkart and Amazon have issued clarifications regarding predatory pricing allegation. It may be noted that the e-commerce majors have reportedly grossed-up over $3 billion in gross merchandise value during the festive sales held over the past fortnight. Both the platforms have been accused of predatory pricing.

Commerce Minister Piyush Goyal on Thursday informed that the government is probing Flipkart and Amazon over the alleged predatory pricing. Warning of stringent action as per the law for any violation, he said that detailed questionnaires have been sent to both companies.

Goyal said, "E-commerce companies have no right to offer discounts or adopt predatory prices. Selling products cheaper and
resulting in the retail sector to incur losses is not allowed. They are also not permitted to own products and sell them. He added that they are only platforms helping sellers connect with potential buyers.

Amazon India issued a clarification on the matter. The company said in its statement, “Amazon has a high bar for compliance and we continue to comply with all applicable laws of the land.  Amazon.in is a third-party marketplace where sellers offer their products to customers for sale."

"Sellers on amazon.in have the absolute discretion to decide what products to sell and at their prices. Amazon cannot and does not participate in seller’s decision related to their products and its prices," the company added.

Flipkart also issued their statement in which the company said, "Flipkart is fully compliant with all laws of the country including FDI regulations. We have always been fully committed to doing business the right way and appreciate the consultative approach that the commerce ministry & DPIIT have taken."

"We continue to be willing to work with the government and all stakeholders to promote a regulatory environment that creates balanced growth that is good for India," the e-tailer added.

Worth mentioning here is that in a letter to Goyal, CAIT urged the Union Minister to order an audit into the business model of all e-commerce firms and the foreign-owned Amazon and Flipkart in particular. CAIT also said that since Amazon and Flipkart claim that individual brands are offering discounts, the government should convene a meeting with major brands to ascertain the truth. The letter read, "The business model of Amazon and Flipkart should be audited by the government to arrive at the real conclusion".

Following the complaint from the trader's body, senior officials of the department for the promotion of industry and internal trade met with Amazon and Flipkart representatives last week.