Amazon CEO Jeff Bezos was greeted with more than less of a lukewarm response on his two-day visit to India to announce the investment of $1 billion to digitize small and medium businesses where he said that in the 21^st century, “the most important alliance is going to be the alliance between India and the United States.”

However, not impressed with Amazon’s intervention, small business owners took to the streets with demonstrations being planned across 300 cities said Sumit Agarwal, National Secretary of the Confederation of All India Traders (CAIT).

Enough of tolerance! @TEAMCAIT @AimraIndia will fight this battle against foreign economic terrorists & invaders till the very end and bring back peace & prosperity for our 70 million retailers. @narendramodi @rajnathsingh @PiyushGoyal @nsitharaman It’s now time for action! https://t.co/aHpsJJNGt1

— SUMIT AGARWAL (@sumitagarwal_82) January 12, 2020

pic.twitter.com/tmOE2TU9O8

— SACHIN LAKHOTIYA (@LakhotiyaSachin) January 14, 2020

Traders of @TEAMCAIT accross Uttar Pradesh protesting against Amazon & Jeff Bezos India Visit. #GOBACKBEZOS @praveendel @BCBHARTIA @sumitagarwal_82 @narendramodi @PiyushGoyal @pankajaroraCAIT @nsitharaman @AmitShah @rajnathsingh @JPNadda @PrakashJavdekar @DIPPGOI pic.twitter.com/ukkC8zzBtf

— CAIT (@TEAMCAIT) January 15, 2020

Cos like Amazon that violate FDI norms are not good foreign investors becoz they engage in illegal & unethical business practices. They have repeatedly circumvented the law, burning cash to push small retailers out of the mkt ⁦@swadeshimanch⁩

https://t.co/wDDRcEjFYa

— ASHWANI MAHAJAN (@ashwani_mahajan) January 15, 2020

Protests against the retail giant were held in Delhi, Jharkhand, Madhya Pradesh, Pune, Patna, Ahmednagar, Jammu, Chattisgarh and Mumbai among other places. Armed with posters that read “Jeff Bezos Go Back” and “Amazon Go Back” protesters complained that Amazon had used its reputation and global presence to undercut small business on price by offering steep discounts to large sellers, something that small business aren’t in a position to do.

The Competition Commission of India, India’s anti-trust regulator too opened an investigation into Amazon and Flipkart alleging them of predatory pricing, the exclusive launch of products like mobile phones, saying they use their market dominance to price inventory ‘below cost’ giving a trying time to business who in turn find it difficult to compete with such prices.

Commerce Minister snubbing Amazon’s Jeff Bezos makes for a great headline in the world’s media.

— P. Chidambaram (@PChidambaram_IN) January 16, 2020

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The e-commerce giants are now under scrutiny for probable violation of the FDI norms in India.

Image Courtesy: india.com

The festive season in India draws humongous crowds to the market. But, in the recent years, a large portion of these crowds have shifted to shopping from brick-and-mortar outlets to e-commerce giants like Amazon and Flipkart for the deep discounts they offer, The Print reported.

These enticing deals that were the main reason for high sales, have now come under the scanner of the government over alleged ‘predatory pricing’ to gain more customers, a business practice that aims to mitigate all competition and one that is under a lot of controversy.

A fortnight ago, a leading Indian trader body, the Confederation of All India Traders (CAIT) had approached the government saying that the discounts offered by Flipkart and Amazon violated the country’s foreign investment rule for online retail.

Calling for a ‘blanket ban’ on such sales, a letter by CAIT to the federal trade minister PiyushGoyalread, “By offering deep discounts ranging from 10% to 80% on their e-commerce portals, these companies are clearly influencing the prices and create an uneven level playing field which is in direct contravention of the policy.”

“He (Goyal) assured the delegation that if need arises and unethical business practices are proven, the government may order an investigation,” said Praveen Khandelwal, CAIT Secretary General.

Prior to the complaint by CAIT, the Department for Promotion of Industry and Internal Trade (DPIIT) also sought to meet representatives of Amazon and Flipkart following complaints by offline retailers that these festival discounts were hurting their business.

Speaking to LiveMint, a Flipkart spokesperson said, “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 & all stakeholders to promote a regulatory environment that creates balanced growth that is good for India. We are proud to be supporting job growth in India, supporting sellers, MSMEs, artisans and working with logistics partners including thousands of kiranas& general trade stores.”

What the FDI rules say

Under the new FDI rules that came in on February 1, e-commerce companies are barred from striking contracts with private companies for exclusive sales of certain items, for example, the One Plus – Amazon partnership and offering discounts.

By preventing exclusive marketing or selling rights in its new FDI policy for e-commerce, the government has disallowed online marketplaces from exclusively selling a product.

As per the current FDI policy, the government permits 100 per cent FDI in the marketplace model of e-commerce but not in the inventory-based model. The online firms are also not allowed to influence directly or indirectly prices of goods to be sold on their platforms.  Both Amazon and Flipkart have maintained that they follow the current FDI policy.

Keeping in mind the current situation, the Competition Commission of India (CCI) will also issue a ‘soft policy advisory’ to the e-commerce industry.

In August this year, the Ministry of Consumer Affairs, Food & Public Distribution released  ‘E-Commerce Guidelines for Consumer Protection 2019’ to protect the rights of online customers. These guidelines make it the e-commerce platform’s responsibility to maintain a “level playing field” and to ensure that it does not “influence the price of the goods or services”.

What the Centre says

Following the complaints from the DPIIT and CAIT, the government asked Flipkart and Amazon to disclose names of top five sellers on their platform, price list of goods of preferred vendors and the kind of support provided to sellers.

Commerce Minister PiyushGoyal said, “E-commerce companies have no right to offer discounts or adopt predatory prices. Selling products cheaper and resulting the retail sector to incur losses is not allowed.”

He added, “If law has been violated in any manner, letter or spirit, strictest action will be taken. BharatiyaJanata Party, the NarendraModi government is very clear that we stand with the small retailers across the country.”

While the advent of e-commerce websites like Amazon and Flipkart have resulted in a free market system, they have above all opened up a vast world, full of innovation, to the online shopper. Such variety is hard to come by at local stores. With festive discounts being dished out all over the country, isn’t it wrong to single out e-commerce companies that are doing the same?

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Flickr/Lorie Shaull

A growing chorus of corporate leaders are speaking out against US President Donald Trump’s executive order, which suspends entry into the United States from citizens (or dual citizens) of seven predominantly Muslim countries.

Hi-tech companies were the first to raise concerns, at least partly because their industry is highly reliant on foreign talent. In fact, one study shows that 51% of America’s billion-dollar startups were set up by immigrants. Some of the sector’s biggest companies have been founded or run by executives, engineers, and managers born abroad. Many came as graduate students and stayed on, as Google’s Sundar Pichai and Microsoft’s Satya Nadella’s cases show. Some, like Google co-founder Sergey Brin, are children of refugees. After the ban. Brin and Pichai addressed Google employees with spirited speeches, expressing solidarity with the staff’s anger. (Brin was also seen at the San Francisco airport, showing support to demonstrators and pro bono lawyers, who are the real heroes of this drama).

(Also read: Business can and should ally with those defending human rights)

Other companies have joined in the protests too: Starbucks announced that it would aggressively recruit refugees over the next five years; Airbnb is offering free rooms to those stranded; Amazon has reached out to US Congressmen to explore legislative options to counter the executive order; and Apple’s CEO Tim Cook also said he is exploring legal options.

Coca Cola, whose CEO Muhtar Kent is Turkish-American, has criticised the travel ban, as has automaker Ford. Goldman Sachs’s CEO Lloyd Blankfein told his employees, “Being diverse is not an option—it is what we must be.” General Electric and Nike, too, have said they oppose the ban. Yogurt maker Chobani, which has recruited refugees for nearly a decade, said it would back every employee who faces any threat or problem because of the executive order.

US corporate leaders deserve praise for speaking out.

Cynics will argue that their moves are calculated—free movement of people, like free movement of goods, benefits the corporate bottom line. Some have even suggested that companies are speaking up because they are global players, and as such have to respond to customers throughout the world, not only in America. True, these companies rely on foreign-born workforces at home and overseas. They also rely on foreign markets for revenue and profit.

And yet, to suggest those considerations drive their public posturing is cynical, because it assumes companies that commit themselves to act in a responsible manner don’t take their own policies and commitments seriously. Many of the companies that have spoken out have policies that include acting in a socially responsible manner, and some have human rights policies in place.

All of these company statements against Trump’s order demonstrate the need for a more nuanced understanding of business-government relationships.

All of these company statements against Trump’s order demonstrate the need for a more nuanced understanding of business-government relationships. CEOs don’t make such decisions lightly. They have many factors to balance, including the safety of their employees and their families. Often, such public advocacy falls way short of what is necessary to protect human rights.

To be sure, the record of these companies may not be perfect. No doubt they can do more, and speak out more often to advocate respect for human rights. But none of that negates from their stand.

Conspicuous by their absence to date are pharmaceutical companies—which rely on foreign talent far more than does the tech sector—and oil companies, which have presence throughout the world, including in countries targeted by the executive order.

All of these company statements against Trump’s order demonstrate the need for a more nuanced understanding of business-government relationships. Corporate critics see businesses as allies of the state—relying on governments for contracts, lobbying to change laws, to lower taxes, and to secure preferential terms. But the role of a corporation today is more complex—the pursuit of the bottom-line is important, but other factors, including appearing to be doing the right thing in a global marketplace, as well as living by corporate values, are also important factors. (Ford’s Mark Fields and Coke’s Muhtar Kent both cited their companies values as one reason they criticised the executive order). The values they’ve spoken of include respect for diversity, dignity, inclusion, and equality.

President Trump has set up a Strategic and Policy Forum to advise him on economic matters, which includes leaders of Wall Street firms like Blackstone, Blackrock, and JP Morgan Chase, as well as GM and Tesla, Uber, Pepsi, Disney, consulting companies EY and Boston Consulting Group, Walmart, Boeing, and IBM, among others. These members certainly have their work cut out for them.

Corporate leaders must use their collective influence to make the case that pursuit of economic prosperity is impossible without respect for human rights. The world is watching them.

(Salil Tripathi is Director of Emerging Issues at the Institute for Human Rights and Business (IHRB). His long experience in advancing the business and human rights agenda includes being a researcher at Amnesty International (1999-2005) and a senior policy adviser at International Alert (2006-2008).

This article was first published on openDemocracy.
 

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