CCI Mulls Moving SC Over Anti Trust Case Against Amazon, Flipkart

The Competition Commission of India (CCI) is considering moving the Supreme Court in connection with the anti trust case against ecommerce players Amazon and Flipkart. 

More than a dozen writ petitions have been filed by sellers in the high courts of Karnataka, Telangana, Madras and Kolkata, challenging CCI’s investigation report that found the ecommerce platforms giving preferential treatment to select sellers, as per media reports.

Narasimhan, advocate, Madras High Court, said the transfer petition would help address multiple queries posed by various parties in different courts. 

“The longer these cases drag, the small sellers and MSMEs who are dependent on the ecommerce ecosystem could be severely impacted,” Narasimhan said.

The development comes after CCI’s director general of investigation (DGI) submitted a report in August confirming suspected violations of competition law by the two ecommerce platforms, particularly regarding preferential treatment and exclusive product launches.

Appario Retail Private Ltd., formerly one of Amazon’s largest sellers, challenged the findings in Karnataka High Court in September. The company alleged that CCI’s DGI violated established procedures by classifying it as an ‘opposite party’ without obtaining the Commission’s prior approval for changing its status from ‘third party’ during the investigation.

On September 27, the Karnataka High Court heard three identical petitions from sellers and granted an interim stay on CCI’s proceedings until November 20.

The legal challenges follow CCI’s recent investigation findings that Amazon and Flipkart violated competition laws by giving preference to select sellers on their platforms. In September, the watchdog sought financial statements from both companies to determine penalties, which could amount to up to 10% of their global annual turnover under the 2023 amendment to competition law.

This comes amid growing regulatory scrutiny of ecommerce platforms in India. Just last month, a Madras High Court lawyer wrote to the DPIIT Secretary alleging that Flipkart was running selective waivers at the product level for select sellers, creating a “skewed and non-competitive environment.”

Earlier in August, union minister Piyush Goyal questioned Amazon’s business practices, particularly its “predatory pricing policies,” suggesting that the exponential growth of ecommerce firms in India could be a “matter of concern.”

The Ministry of Corporate Affairs has also proposed a draft digital competition bill aimed at regulating major entities based on factors including turnover, gross merchandise value, global market capitalisation and user numbers, in an effort to crack down on alleged anti-competitive practices by big tech companies.