Amazon.com Inc. is dissolving a controversial joint venture in India with billionaire Narayana Murthy, a potential setback for the e-commerce giant as the country's online market is expected to grow to $ 1,000 billion.
The seven-year joint venture called Prione Business Services Pvt., Will cease operations from mid-2022, the companies said on Monday.
The company that started out by helping merchants sell their products online before becoming the dominant supplier, is owned by Seattle-based giant Jeff Bezos and Catamaran Ventures LLP, Murthy's private equity firm, co-founder of 'Infosys Ltd.
The partners "jointly decided not to continue the joint venture after the end of the current mandate," they said in a statement. The joint venture has enabled more than 300,000 online merchants and entrepreneurs and 4 million merchants to have digital payment capabilities, they said. The Indian Competition Commission launched an investigation last year into the company and Walmart Inc. empowered Flipkart after local retailers accused the giants of abusing their dominance through steep discounts, allowances exclusive, and favorable support from some sellers. .
On Monday, India's Supreme Court dismissed Amazon and Flipkart's requests to stay the investigation, ruling on Monday that an antitrust investigation could be opened. This adds to the pressure on Amazon and Murthy, who will turn 75 later this month, to end their partnership, which has been criticized as violating the spirit of India's e-commerce laws.
“We expect big giants like Amazon, Flipkart to volunteer for investigation and transparency and you don't even want that,” Chief Justice N.V. Ramana said in the ruling. "The request must be authorized."