Cloudtail India is one of the largest sellers on Amazon. The news of the shutting down of Cloudtail India comes on the same day as the Supreme court ruled that Amazon and Flipkart will have to continue facing an antitrust investigation in their business practices. Cloudtail India will stop its operations next May. The joint-venture partners of the company Amazon and N.R. Narayana Murthy-owned Catamaran Ventures have decided not to renew the seven-year-old partnership.
According to rules, a foreign entity running an online marketplace or its group companies cannot own equity in any of the sellers on the platform or have control over their inventory. Amazon, therefore, reduced its 49% stake to 24% in Cloudtail and Appario. Cloudtail and Appario are the two top sellers on Amazon’s marketplace.
Cloudtail had a wide presence on the Amazon India marketplace in various categories including smartphones, electronics, and fashion. But recently they have moved away from smartphones and have been focusing on electronics and daily necessities.
The Supreme Court of India has also ruled that e-commerce giants Amazon and Flipkart must face an antitrust probe by the Competition Commission of India (CCI). The companies had approached SC to quash the probe which was ordered by the Karnataka High Court. The CCI had earlier said that it had found evidence under these companies for an investigation under Section 26 (1) of the Competition Act, 2002. This was after a series of allegations against the companies that they offered “predatory” high discounts and chose only select sellers. The companies have denied any wrongdoings in this matter. They are now given four weeks to report back to the CCI’s queries.