The Enforcement Directorate (ED) is conducting pan-India raids on sellers associated with major e-commerce platforms such as Amazon and Flipkart in response to a probe into alleged money laundering. Sources told CNBC-TV18 that the raids focused on uncovering financial irregularities among vendors associated with these famous online marketplaces.
The nationwide operation involves scouring various seller locations as well as subsidiaries of these e-commerce giants. According to CNBC-TV18, the Ministry of Education’s investigation aims to identify and collect evidence related to suspected money laundering activities that may be conducted through these platforms.
Livemint was unable to independently verify the development of this news.
Sources revealed that the education ministry is investigating possible misuse of these platforms by some sellers who may be engaged in illegal financial activities and may use sales on Amazon and Flipkart as a means to channel and conceal illegal funds.
India’s two largest e-commerce platforms, Amazon and Flipkart, have previously come under scrutiny for their business practices. However, this latest investigation specifically targets third-party sellers and their transactions on these websites, with a focus on compliance with the Prevention of Money Laundering Act (PMLA), according to the report.
ED’s action underscores the government’s ongoing efforts to ensure greater transparency and accountability in India’s fast-growing e-commerce industry, which is increasingly under the watchful eye of regulators. Amazon and Flipkart have yet to issue an official statement on the attack.
In early September this year, it was reported that an investigation by India’s antitrust agency concluded that Amazon and Walmart-owned Flipkart violated local competition laws by favoring specific sellers on their platforms. According to documents reviewed by Reuters, the Competition Commission of India (CCI) found that both companies promoted promotions for select sellers with whom they had business ties, making them appear more prominently in search results, which put other sellers at a disadvantage .
The CCI initially launched the investigation in 2020 to look into allegations that Amazon and Flipkart were prioritizing certain goods related to business arrangements. The findings, detailed in two separate reports – a 1,027-page document from Amazon and a 1,696-page document from Flipkart, both dated August 9 – suggest that the two e-commerce giants have created an ongoing The environment that emphasizes giving priority to sellers affects market competition.
