Amazon’s Jeff Bezos is on India’s bad magazine cover ahead of Diwali season
(Bloomberg review) — The second richest man in the world receives an almost daily reminder of how hard it is to win in the second most populous country.
Unlike China, where the recent attack on tech titans was carried out with all the formal might of state power, the latest blow to Amazon.com Inc. in India has come from unexpected and unofficial quarters. .
President Jeff Bezos is on the cover of Panchjanya, a Hindi weekly he’s probably never heard of. The article inside, with the provocative title “East India Company 2.0”goes on to claim that Amazon threatens the economic freedom of small Indian traders, attempts to hijack policies and politics, and through Prime Video degrades 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? Bezos and his empire have both faced heavy criticism around the world, for everything from low pay and poor working conditions in the retailer’s warehouses until its alleged anti-competitive practices. Speaking of unfavorable articles, Lina Khan earned his spurs with his 2017 Yale Law Journal entry, “The Amazon Antitrust Paradox” and she is 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 another magazine. Founded by one of the leading figures of the Rashtriya Swayamsevak Sangh, or RSS, he is widely seen as the spokesperson for the Hindu cultural organization that supports Prime Minister Narendra Modi’s government, feeding his right-wing nationalist party with ideological sustenance and 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 channeled into 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 transplant. 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 quantify 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 harming small sellers, clung to the figure and wrote to Trade Minister Piyush Goyal – himself not a fan of e-commerce platforms – about a “huge amount” spent to “manipulate Indian government officials”.
Amazon said the number was a misleading representation. Amazon Seller Services Pvt., which is the marketplace in India, has paid 520 million rupees in legal fees in a year in which it incurred nearly Rs 20 billion of expenditure on “legal and professional services”, which includes everything from bookkeeping and client research to onboarding costs merchants 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 “crop cultivation”.
Either way, the e-commerce giant must investigate the whistleblower’s complaint. Based on the findings, the United States Securities and Exchange Commission, which enforces Foreign Corrupt Practices Act together with the Ministry of Justice, will have to determine whether the law has been broken. But Panchjanya don’t expect any 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 trade. 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 carpet? 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 “Dramatically reduced prices” – are in draft form and face opposition within the government.
The attacks don’t stop there. The September 5 issue of Panchjanya had on its cover, in a similarly unflattering light, Narayana Murthyco-founder of software company Infosys Ltd. The article referred to problems in the electronic tax filing portal that the vendor developed for India to make unsubstantiated accusations that made many in the country’s private sector nervous. “There are allegations that Infosys management is deliberately trying to destabilize the Indian economy,” he said. Interestingly, Murthy, now just a big shareholder in Infosys, owns, through his family office, three-quarters of Cloudtail, the largest seller of goods made by others. on Amazon’s Indian site. Amazon owns the rest. Facing scrutiny from large resellers logged into the retail website, the partners agreed to dissolve the joint venture by next year. (Murthy did not publicly comment on the article, while the RSS sought to move away saying that the magazine is not its spokesperson.)
Libelous claims 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.
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.