SUMMARY
Karnataka HC last week allowed CCI to probe against alleged anti-competitive practices undertaken by Flipkart and Amazon
Amazon is expected to appeal SC against the order in the coming days
Delhi Vyapar Mahasangh had alleged Flipkart and Amazon of predatory pricing, listings of preferential sellers, exclusive partnership, heavy discounting, among others.
Walmart-owned Flipkart has knocked on the gates of the Supreme Court against the Karnataka High Court order allowing the Competition Commission of India (CCI) to probe against alleged anti-competitive practices inculcated by Flipkart and Amazon.
According to a Reuters report, Flipkart has filed an appeal in the apex court challenging the Karnataka HC’s last week order. As per the Supreme Court’s website Flipkart has filed a case against CCI and other parties. Amazon is also expected to appeal against the judgment in the Supreme Court.
Mint reported that Flipkart has argued that Karnataka HC has failed to argue that CCI did not comply with its own requirement before ordering a probe. It further said CCI did not showcase any agreements to Flipkart that violate provisions of competition law or showed the existence of a prima facie finding of any violation of the Competition Act.
Last week a division bench of Justices Satish Chandra Sharma and Natraj Rangaswamy allowed CCI to probe into these two big ecommerce companies operating in the country. The latest order upheld the order given by a single judge of the High Court last month.
CCI had earlier ordered a probe against Amazon into allegations of anti-competitive conduct in the online sales of smartphones. Then, Delhi Vyapar Mahasangh (DVM), a union of micro, small and medium-sized enterprises had alleged Flipkart and Amazon of predatory pricing, listings of preferential sellers, exclusive partnership, heavy discounting, among others.
During the hearing last week, additional solicitor general (ASG) Madhavi Divan, appearing for CCI contested that Amazon and Flipkart give preference to certain sellers, thus they are active participants in the process. He argued that the idea of the Competition Act is to eliminate anti-competitive elements and to ensure that everyone gets the same level of field.
Back then Amazon had argued that its algorithm is dictated by customers and preferential listing is based on the customers. After the hearing, a Flipkart spokesperson told Inc42 that it will review the order as soon as it gets the order copy. “We will do everything to be always compliant,” the spokesperson said. Amazon had said that it respects the order by the High Court and will review the judgement in detail to determine its next step.
This is the latest setback for Amazon in the country as CCI had earlier accused Amazon of hiding facts and making false submissions when it sought approval from CCI for its investment in Kishore Biyani led-Future Group in 2019. It had further asked Amazon why it shouldn’t take an action against Amazon and penalise it for misinforming CCI.
Both Flipkart and Amazon are also under the radar of RBI and ED for alleged flouting of FEMA and FDI policy.
