CAIT Alleges Inaction In CCI’s Probe Against Amazon & Flipkart

The Confederation of All India Traders (CAIT) has alleged the Competition Commission of India (CCI) of inaction and mishandling investigations into anti-competitive practices by ecommerce majors Amazon and Flipkart. 

In a letter to finance minister Nirmala Sitharaman today (October 3), CAIT raised concerns over the alleged delays in addressing the violations of India’s FDI policies by the two ecommerce giants. 

According to CAIT, Amazon and Flipkart have been bypassing regulations by using proxy sellers to control inventory and dominate listings on their platforms. 

These sellers, according to CAIT, benefit from reduced fees and exclusive product launches, while independent traders are burdened with significantly higher charges, distorting the competitive landscape.

It criticised the CCI for not taking decisive action on numerous complaints filed by various trade associations and individuals. 

The industry body pointed to multiple cases involving allegations of preferential treatment, deep discounting, and exclusive deals with mobile manufacturers that have either been dismissed or subjected to significant delays. 

Even after the Supreme Court gave the green light for investigations, CAIT said that progress has been limited, with the CCI showing little urgency in addressing these complaints.

A key point of contention for CAIT is the CCI’s decision to separate investigations into Amazon and Flipkart, a move the organisation argues has only prolonged the process. 

The Director General’s office submitted a detailed investigation report in December 2023, but the CCI took five additional months to request separate reports for the two companies. 

CAIT argues that this decision has delayed the comprehensive review of their anti-competitive practices, further stalling action.

In addition to these procedural delays, CAIT expressed concerns about alleged bias within the CCI’s antitrust division, suggesting that certain officials may be favouring the ecommerce giants.

The traders’ body demanded the removal of officials who have been in their positions for more than three years, in line with government policy, and called for stricter oversight on those involved in handling the case.

Notably, earlier this week, CAIT 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.