Commerce and industry minister Piyush Goyal has warned eCommerce companies of strict action if they don’t halt predatory pricing on their platforms, flouting foreign direct investment (FDI) rules, said officials with knowledge of the matter.

The issue figured in a discussion Goyal had with Amazon India head Amit Agarwal on November 5, they said.

Piyush Goyal

“Ecommerce companies need to comply with the rules — we have told them to stop predatory pricing,” said one of the officials. The issue of violating norms is not India-specific as Amazon also faces antitrust probes in the US and the EU, the official said. The marketplaces have said repeatedly that they are in compliance with Indian rules and that any discounts were being offered directly by sellers to buyers.

One area of interest in the US is whether Amazon has an unfair advantage over third-party merchants when it competes with them to trade similar products on its own platform, the person said.

The Competition Commission of India said last year that Flipkart and Amazon were not dominant among online marketplace platforms in the country. They, therefore, didn’t contravene Section 4 of the Competition Act, which deals with anti-competitive issues, it had said.

“We continue to engage with the government and have emphasized how we have consistently worked closely with local Kirana stores and other small businesses in the last six years,” an Amazon spokesperson told ET. “We have over 23,000 Kirana stores as IHS (I Have Space) stores across 350 cities, over 14,000 Amazon Easy stores across 22 states and nearly 60% of our top 2,000 sellers are offline retailers.”