All Amazon – based companies in India have combined to spend Rs 8,546 crore as legal fees for the 2018-19 and 2019-20 financial years. This is about five or 20 percent of the two-year revenue of Rs 42,085 crore, according to data from public accounting by an Indian company.
“While India is at the forefront of doing business, it continues to be a highly regulated market and compliance has its costs. But Amazon is not the only one with high legal costs, its competitors Flipkart are likely to have the same costs as several major companies,” said an industry expert who requested anonymity. due to his association with e-commerce companies.
The legal expert also pointed out that most of the costs shown as legal fees may not actually be related to prosecution but to directing activities in the country.
Amazon India has not released anything on this issue. “We have no comment on this at this time,” said an email from the company.
A Morning Context report said Amazon had launched an investigation after a whistleblower lodged a complaint with a company lawyer who was involved in bribing Indian officials. While the company did not comment on the matter, it said immediate action was taken against all wrongdoing.
While the role of legal advocates is highlighted in this report, the focus is on the huge costs Amazon makes as legal fees.
Among the highest legal fees reported are two corporations of Indian e-commerce companies – Amazon India Ltd (holding company) and Amazon Seller Services Pvt Ltd. – The two together have spent almost Rs 8,000 crore as legal fees for the past two financial years (FY19 and FY20).
Other Amazon organizations in India – Amazon Retail India, Amazon Transportation Services, Amazon Wholesale and Amazon Internet Services – also have higher legal costs in proportion to their size.
