SUMMARY
CCI had initiated a probe the business models of Amazon and Flipkart last month
It was alleged that Amazon has created an anti-competitive business environment
Karnataka HC has issued a stay order on the CCI Amazon investigation
The Competition Commission of India (CCI) failed to find any evidence proving that ecommerce giants Amazon and Flipkart had exclusive deals with smartphone manufacturers.
As per an ET report, the judge pointed out that “in paragraphs No. 22 and 23 (of the CCI order) that there ‘appears’ to be exclusive partnership between smartphone manufacturers and ecommerce platforms. This finding is based on allegations made in the complaint.”
“The contention urged on behalf of the petitioner (Amazon) that CCI has imagined (the) existence of ‘some agreement’ merits consideration,” the detailed transcript of the court order highlighted.
The CCI had ordered a probe on a complaint filed by Delhi Vyapar Mahasangh, who alleged that Amazon and Flipkart give preferential treatment to select sellers and offer deep discounting as well. The association emphasised that such practices were creating an anti-competitive environment, giving the ecommerce players unfair advantage.
The CCI investigation order was issued a day before the arrival of Amazon’s founder and CEO Jeff Bezos in India, i.e January 13, 2020. The CCI had ordered an investigation on Amazon and Flipkart. CCI alleged that the two companies are involved in unethical practices in violation of the competition law.
Many small traders in India have accused Amazon and Flipkart of eating into their businesses by deep discounting, predatory pricing, preferential selling, and exclusive tie-ups with brands and banks.
Besides that, the trader organisations like Confederation of All India Traders (CAIT) have also been accusing the ecommerce companies of non-compliance with foreign direct investments (FDI). All these grievances were the grounds of CCI’s investigation.
Two weeks ago, Amazon had moved to the Karnataka High Court seeking a stay on the CCI’s investigation. But the CCI clarified that it is not going to stop the investigation as the claims of ecommerce giant were baseless. Amazon told the HC that the CCI passed the order ‘without application of mind’ and they do not have any prima facie evidence to order an investigation into it.
On its part, CCI had informed the HC that it will not stop the investigation as the claims made by Amazon are baseless. CCI’s lawyer for the case, senior counsel Harish Narsappa, also added that Amazon’s claims are ‘mischievous’.
In its submission to the HC, CCI had maintained that the company needs to have full jurisdiction to investigate the anti-competitive activities of Amazon. However, on February 14, the HC put a stay on CCI’s investigation. Plus, it has asked the CCI and traders’ body like CAIT to submit their responses within eight weeks. Moreover, the HC asked the enforcement director to complete its investigation first.
