Tech & Competition

Amazon & Flipkart challenge CCI investigation before Division Bench

Last week, the Karnataka High Court rejected the allegations that the Competition Commission of India (CCI) lacks evidence to investigate Amazon & Flipkart. Following the go ahead, the CCI said that it will expedite the investigation into alleged anti-competitive behaviour of these e-marketplaces. However, Amazon & Flipkart have now filed a challenge to the Karnataka High Court order allowing CCI investigation before a Division bench.

As per the Economic Times, while Flipkart filed its appeal on Wednesday, Amazon did it on Thursday morning. The matter is likely to be heard tomorrow.

The issue

The Competition Commission had ordered an investigation last year, after it received complaints regarding malpractice. The Confederation of All India Traders (CAIT) and Delhi Vyapar Mahasangh (DVM) had alleged that Amazon and Flipkart were favoring a few sellers and offering deep discounts to stifle competition. It said that it had prima facie evidence to begin an investigation under Section 26 (1) of the Competition Act, 2002.

Ant-Competitive Behaviour

A recent report by the Reuters had corroborated the complaint, and the CCI even conveyed the same to the High Court. It substantiated that these companies created a marketplace to allow other business sell products on their platform, but compete against those businesses. In February, 2019, the government of India mended foreign direct investment (FDI) rules in ecommerce, to stop such behavior. But the Reuters report goes on to display how these marketplaces go around those rules- aimed to protect small businesses.

As per Amazon’s internal documents, just 33 Amazon vendors accounted for around one-third of the total value of all goods sold. Furthermore, in early 2019, two merchants accounted for 35% of the marketplace’s sales revenue. Amazon had a stake in both of those merchants. Two-thirds of its online sales were accounted for by 35 retailers on its platform.

Do subscribe to our Telegram channel for more resources and discussions on technology law and news. To receive weekly updates, don’t forget to subscribe to our Newsletter.

Rohit Ranjan Praveer

Rohit is a practicing advocate at Delhi. Beginning as a tech enthusiast, Rohit always had a keen interest in computer forensics and information security. Building upon these fundamentals, he has undertaken extensive research on various techno-legal topics and continues his pursuit pass on valuable information to the masses, with a zeal to build something that outlasts him.​

Share your thoughts!

This site uses Akismet to reduce spam. Learn how your comment data is processed.