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Excluding rivals, killing competition hurt small businesses: US Senator, a day after India report on Amazon

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Ease of Doing Business for MSMEs: When dominant tech companies exclude rivals and kill competition, it hurts small businesses and can increase costs for YOU,” US Senator Amy Klobuchar from Minnesota tweeted a day after Reuters published a report on Wednesday explaining how Amazon’s private-brands team in India used Amazon.in data to copy other companies’ products to sell on its marketplace. Klobuchar, in a separate statement, announced that along with Iowa Senator Chuck Grassley, they will introduce bipartisan legislation to ensure that ‘big tech’ cannot unfairly preference their own products and services by abusing their market power to harm competition in the US.

“Big Tech needs to be held accountable if they behave in a discriminatory manner. Our bill will help create a more even playing field and ensure that small businesses are able to compete with these platforms,” Grassley said. Big Tech refers to Apple, Google, Amazon, Facebook, and Microsoft. 

The new bill named the American Innovation and Choice Online Act will set rules for prohibiting specific forms of conduct that are harmful to small businesses, entrepreneurs, and consumers, but that do not have any pro-competitive benefit. The forms, according to the statement included preventing another business’s product or service from interoperating with the dominant platform or another business, requiring a business to buy a dominant platform’s goods or services for preferred placement on its platform, misusing a business’s data to compete against them; and biasing search results in favor of the dominant firm.

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Crores of traders in India, represented by trade body Confederation of All India Traders, which have been accusing Amazon and Flipkart of business malpractices, have now sought a CBI inquiry against Amazon. “India is not the only country where Amazon is violating the law. In fact, it is penalised by several countries for various offenses. Prominently among them is the imposition of a fine of $886.6 million by the European Union in July 2021, €35 million by France in 2020, and $134,523 by the Treasury Department of the US in 2020. This establishes that Amazon is a known global law offender,” CAIT National President B C Bhartia and Secretary General Praveen Khandelwal said in a joint statement. 

The news report, citing internal documents of Amazon such as emails, strategy papers, and business plans, said that documents showed that the company ran a “systematic campaign of creating knockoffs and manipulating search results to boost its own product lines in India”. Amazon in its response to the questions for the report had said that “As Reuters hasn’t shared the documents or their provenance with us, we are unable to confirm the veracity or otherwise of the information and claims as stated. We believe these claims are factually incorrect and unsubstantiated.”

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