SUMMARY
Flipkart and Amazon are both challenging Karnataka HC order which allowed CCI probe
The recent development is a major setback for Amazon as it was recently accused by CCI for hiding facts in separate case
DMV had alleged Flipkart and Amazon of predatory pricing, listings of preferential sellers, exclusive partnership, heavy discounting, among others
A day after Flipkart approached Supreme Court challenging Karnataka High Court (HC) judgement, Amazon has followed Flipkart’s suit. Both Flipkart and Amazon are challenging the state HC’s order that gave a nod to Competition Commission of India to probe into both heavy ecommerce giants for alleged anti-competitive practices inculcated by them.
According to a Reuters report, details of the appeals filed by Amazon against the state HC was not clear.
Mint reported that in a 700 page appeal, Flipkart said that CCI did not comply with its own requirement before ordering a probe. The Walmart-owned company further said CCI also failed to showcase any agreements of Flipkart that violate provisions of competition law or showed the existence of a prima facie finding of any violation of the Competition Act.
A division bench of Justices Satish Chandra Sharma and Natraj Rangaswamy of Karnataka HC last week allowed CCI, the statutory body of the government to probe into both Flipkart and Amazon. Both the ecommerce firms had appealed to the state HC to quash the CCI probe request. Back then the court had said that inquiry cannot be quashed at this stage and appellants should not be afraid of an investigation. This order further upheld an order given by a single judge of the same HC last month.
CCI has been acting upon a complaint filed by the Delhi Vyapar Mahasangh (DMV), a union of micro, small and medium-sized enterprises. The body had alleged both Amazon and Flipkart of favouring certain sellers, exclusive partnership, heavy discounting, and predatory pricing.
During the hearing last week, additional solicitor general (ASG) Madhavi Divan, appearing for CCI said that both the companies give preference to certain sellers, thus they are active participants in the process. He maintained that the idea of the Competition Act is to eliminate anti-competitive elements and to ensure that everyone gets the same level of field.
Both the companies are under the radar of the government of India and other investigative agencies. According to reports, earlier this year the government of India was mulling to revise the FDI policy after facing intense pressure from Confederation of All India Trades. Apart from this Department for Promotion of Industry and Internal Trade (DPIIT) had sought intervention from the Enforcement Directorate and Reserve Bank of India as Flipkart and Amazon had allegedly flouted Foreign Exchange Management Act and India’s FDI policy.
The latest appeal in the apex court is a further setback for Amazon which was last week accused by the CCI for hiding facts and making false submission when it sought CCI’s approval for its investment in Future Group back in 2019.
