President Jeff Bezos is on the cover of Panchjanya, a Hindi weekly he’s probably never heard of. The article inside, provocatively titled “East India Company 2.0”, goes on to claim that Amazon is threatening the economic freedom of India’s small traders, trying to hijack policies and politics and – via Prime Video – degrading the Hindu culture and promotes Western values and Christianity.
There is nothing flattering in being compared to the 17th century British firm that came to trade with a rich and vast land only to conquer and plunder it. But does stigma really mean much? Both Bezos and his empire have come under heavy criticism around the world, for everything from low wages and poor working conditions in the retailer’s warehouses to his alleged anti-competitive practices. Speaking of unfavorable articles, Lina Khan earned her spurs with her 2017 Yale Law Journal entry, “Amazon’s Antitrust Paradox,” and she’s now the chair of the United States Federal Trade Commission.
The reason to take the disapproval of the Indian publication seriously is that Panchjanya, “the sound of justice”, is not just any other magazine. Founded by one of the leading figures of the Rashtriya Swayamsevak Sangh, or RSS, it is widely seen as the mouthpiece of the Hindu cultural organization that backs Prime Minister Narendra Modi’s government, feeding his right-wing nationalist party with a ideological sustenance and a voter. mobilization.
The timing of Amazon’s bad publicity couldn’t have been worse. Media site Morning Context recently reported that the Seattle-based e-commerce company was investigating a whistleblower complaint, which alleged that certain amounts paid by the retailer had been misappropriated as bribes by one or more of its legal representatives in India. In its response to the news site’s questionnaire, Amazon said it had “zero tolerance” for corruption. He declined to confirm the specific allegations or the status of any investigation.
How widespread is this alleged corruption? Shortly after the Morning Context exclusive, there was a flurry of other media reports, citing unnamed sources to figure out what various Amazon entities had spent on legal fees in India over two years: 85 .46 billion rupees ($1.2 billion). The All India Traders Confederation, which accuses the platform of hurting small sellers, latched onto the figure and wrote to Commerce Minister Piyush Goyal – himself not a fan of e-commerce platforms – at about an “enormous sum” spent on “manipulating the Indians”. government officials.”
Amazon said the number was a misleading representation. Amazon Seller Services Pvt., which is the marketplace in India, paid 520 million rupees in legal fees in one year while it incurred almost 20 billion rupees of expenses under “legal and professional services”, which include everything from accounting to finding customers to merchant onboarding costs and logistics services. It appears that the $1.2 billion figure also includes payments from Amazon India Ltd. – a 26-year-old, totally independent company, nestled in the old Mughal district of Delhi and committed to the “culture of cultures”.
Either way, the e-commerce giant must investigate the whistleblower’s complaint. Based on the findings, the U.S. Securities and Exchange Commission, which enforces the Foreign Corrupt Practices Act jointly with the Department of Justice, will need to determine whether the law has been violated. But Panchjanya expects none of this. In the Amazon he found his rapacious colonizer come to destroy India again. “Why does someone need to offer a bribe?” request the item. “Only to do something wrong or to hide it.” Online shopping is not even a tenth of India’s $800 billion retail business. Yes, Amazon runs one of the two dominant digital marketplaces and has valuable customer data. But nowhere is it as powerful or ubiquitous as China’s Alibaba Group Holding Ltd. A Prime Video series in India, made by Indian writers and directors, can say whatever it wants against caste, misogyny or religious hatred. He won’t move the needle in elections, which routinely use all kinds of bias to polarize voters.
So why is Amazon called on the mat? Simple answer: Diwali. The Indian holiday season is approaching and the pandemic is receding. People with stable jobs and incomes – members of a shrunken middle class – want to breathe. And they want to buy. Destabilizing the US giant now will push more business to local offline retailers. New rules that will protect them – by prohibiting e-commerce marketplaces from offering ‘significantly reduced prices’ – are in draft form and face opposition in government.
The attacks don’t stop there. The September 5 issue of Panchjanya had on its cover, in a similarly unflattering light, Narayana Murthy, co-founder of software company Infosys Ltd. The article referred to problems in the electronic tax filing portal that the vendor has developed for India in order to unsubstantiated accusations that have made many private sector players in the country nervous. “There are allegations that Infosys management is deliberately trying to destabilize the Indian economy,” he said. Interestingly, Murthy, now just a major shareholder of Infosys, owns, through his family office, three-quarters of Cloudtail, the largest seller of products made by others on the site. Amazon Indian web. Amazon owns the rest. Facing scrutiny from large resellers connected to the retail website, the partners agreed to disband the joint venture by next year. (Murthy has not publicly commented on the story, while the RSS has sought to distance itself by saying the magazine is not its mouthpiece.) The slanderous allegations are only part of the problem. As Canadian communications theorist Marshall McLuhan said, the medium is the message. The RSS, an all-male organization of petty traders, builders and businessmen, can be a formidable foe, especially in the current climate of strident economic nationalism in India.
First Bezos partner finds himself on the wrong magazine cover. So he does. That’s enough to turn the Amazon Indian headache, which has been accumulating for more than five years, into a throbbing migraine.
This column does not necessarily reflect the opinion of the Editorial Board or of Bloomberg LP and its owners.
Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He was previously a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and Bloomberg News.
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