Amazon, Flipkart Probe: CCI Seeks Sales Data From Apple, Xiaomi

The Enforcement Directorate (ED) has asked smartphone makers like Apple and Xiaomi to share sales data and other documents as part of its ongoing probe into Amazon and Flipkart. 

According to a Reuters report, the ED is investigating if the two ecommerce majors broke Indian laws by controlling inventory and influencing pricing, something foreign-owned platforms aren’t allowed to do under the current rules. 

According to the law, foreign ecommerce companies can only act as a marketplace connecting buyers and sellers.

Apple received a formal request from the ED in March, the report said. The agency is also seeking contract agreements signed between smartphone companies and the said platforms to check for exclusive or preferential arrangements.

Inc42 has reached out to both Apple and Xiaomi for comments on the development. The story will be updated based on the responses.

However, officials told Reuters that the phone companies were approached only for information, not as targets of the probe. “Eventually if there’s wrongdoing, there will be monetary penalties (on ecommerce companies),” the report quoted an official as saying.

CCI’s Crackdown on Flipkart, Amazon 

Notably, the ecommerce majors have been under the radar of the antitrust watchdog for over half a decade now. In 2020, the watchdog ordered a probe against Amazon and Walmart-owned Flipkart after receiving complaints from trade body Delhi Vyapar Mahasangh. 

Following this, the companies legally challenged the probe multiple times. However, the Supreme Court (SC) rejected their pleas to put the investigations on hold in 2021. 

Subsequently in 2022, the CCI conducted raids at the offices of the sellers of Amazon India and Flipkart. At the time, the CCI investigators reportedly collected emails, documents and data from computers at these premises.

In 2024, the watchdog released its report which found ecommerce giants Amazon and Flipkart guilty of violating competition laws. Both the tech giants were found to have flouted antitrust guidelines by giving preference to select sellers on their platforms.

“Each of the anti-competitive practices alleged… were investigated and found to be true… Ordinary sellers remained as mere database entries,” said the CCI report at the time. 

On Amazon, the CCI at the time said that preferred sellers on the platform got “advantage in the (online) listing”, adding that a customer’s “attention” was drawn towards the listing when he/she searches for any product.

Meanwhile, it said that preferred sellers on Flipkart were provided various services such as marketing and delivery at a “miniscule cost”. The CCI also said that Flipkart enabled sellers to see phones with a deep discount, which led to predatory pricing.

Notably, the CAIT, in October last year, released a white paper highlighting a need for establishing a dedicated ecommerce regulator to address unfair trade practices in the Indian ecommerce market.

In the white paper, CAIT outlined several recommendations to create a unified dispute resolution mechanism and streamline the regulatory framework for governing ecommerce platforms.

It is pertinent to note that the latest development comes at a time when the US, as per a report by Financial Times, is reportedly pressing India to give complete access to the latter’s ecommerce market under the ongoing bilateral trade deal negotiations between the two countries. 

Tech Giants Under CCI’s Lens

Not just the ecommerce platforms, several other big tech giants are also being examined by the fairtrade regulator for alleged violations of antitrust laws.

For instance, in 2020 the watchdog received complaints that Google, by misusing its dominant position in the Android TV market, forced smart TV manufacturers to pre-install specific Google apps and restrict the use of competing operating systems. 

Recently, Google settled the case by paying about INR 20 Cr earlier this year. 

In 2022, the CCI also levied penalties worth INR 2,274.2 Cr on Google in two different cases for abuse of dominant position in the Android market and anti-competitive Play Store policies. 

Similarly, Apple is also being probed by the watchdog for alleged abuse of its dominant position to force developers to use in-app payment systems. 

In November last year, the CCI also slapped a penalty of INR 213.14 Cr on Meta for abusing its dominant position, in relation to the 2021 WhatsApp privacy policy case.

At the time, the CCI argued that the data sharing between WhatsApp and Meta created barriers for competitors.