Indian authorities will summon the executives of Flipkart and Amazon as the investigation improves into alleged violations of foreign investment law, media said. The financial crime agency will summon executives of e-commerce companies as they step up investment, reports said citing a senior government source.

According to a Reuters report, the move highlights increased regulatory scrutiny of these companies as they see a massive jump in their sales and India’s e-commerce market surpasses $70 billion.

The report said that an antitrust investigation found that these two firms broke laws by favoring certain vendors. Meanwhile, the companies have said they are complying with domestic laws.

However, for years, the Enforcement Directorate has been continuing its investigation into the allegations against these firms that they exercise control over the stock of goods through selected sellers.

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Indian laws prohibit foreign e-commerce firms from owning an inventory of products that they can sell on their website. This essentially forces these players to operate through a seller’s market.

The report quoted a senior government source directly involved in the matter as saying that the Directorate raided Amazon and Flipkart sellers last week and now the agency plans to summon the executives of these companies. Officials are currently reviewing the documents seized in the raid.

The raid operation continued till Saturday and the searches proved that foreign investment rules were violated, the source said. The report also stated that the Directorate will also analyze business data from vendors and their relationships with these companies for at least the past five years.

Flipkart currently controls a 32% share of the Indian e-commerce market, while Amazon has a 24% share in the space, Datum Intelligence estimates revealed.

In particular, scrutiny of online shopping and delivery platforms in India has increased as more complaints emerge that unfair business practices hurt smaller players in the market.

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