Amazon Clarifies on its Hefty Legal Expenses in India; Assures of Investigation in the Case

According to the official data from the public account filings made by the company, all of Amazon's India focused companies together have spent Rs 8,546 crore as legal fees in the financial years 2018-19 and 2019-20.
Amazon Clarifies on its Hefty Legal Expenses in India; Assures of Investigation in the Case

US-based e-commerce giant Amazon has spent a staggering over Rs 8,546 crore or US $ 1.2 billion in legal expenses in the last two years in order to maintain its presence and relevance in the Indian retail market during 2018-20.

According to the official data from the public account filings made by the company, all of Amazon's India focused companies together have spent Rs 8,546 crore as legal fees in the financial years 2018-19 and 2019-20. This is almost a fifth or 20 percent of its two-year revenue of Rs 42,085 crore.

"Despite India moving high on ease of doing business, it continues to be a highly regulated market and compliance to regulations has its own costs. But Amazon is not the only one having high legal expenses, it's competitors Flipkart may be having similar level of expenses and so are several large corporations," said an industry expert.

A legal expert maintained that most of the expenses shown as legal fees may not actually be going towards compliance and litigations. Amazon is currently being investigated on its legal representatives in India allegedly paying bribes to facilitate its operations in the country.

While the company has not commented on this specific allegation, it has said that action is taken promptly for all improper actions.

Amongst the highest legal fees reported are two entities of e-commerce player's Indian companies -- Amazon India Ltd (holding company) and Amazon Seller Services Pvt Ltd. -- the two together spent close to Rs 8,000 crore as legal fees in the past two financial years (FY19 and FY20).

The other entities of Amazon in India -- Amazon Retail India, Amazon Transportation Services, Amazon Wholesale and Amazon Internet Services -- also have high levels of legal charges commensurate with their size.

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