While denying the allegations, both e-tailers approached the Karnataka High Court, and later the apex court. But the courts refused to interfere in the investigation ordered by CCI.
The Competition Commission of India (CCI) is planning to expand the scope of investigation against Amazon and Flipkart in connection with their alleged contravention of the anti-trust regulations, said an official familiar with the development.
A report was submitted by the investigation arm over six months ago. However, since then, the CCI has asked for more information from the investigation arm.
“Once the scope of the probe is finalised, the report will be shared with Amazon and Flipkart for their replies,”
said the official.
The probe against Amazon and Flipkart goes back to 2021 when the CCI started an investigation based on the allegations made against the e-commerce majors that they are promoting their own brands and preferred sellers, and giving steep discounts, undermining other sellers on their platforms.
While denying the allegations, both e-tailers approached the Karnataka High Court, and later the apex court. But the courts refused to interfere in the investigation ordered by CCI.
“There’s a clear case of antitrust rules violations by these entities. There are violations of Foreign Direct Investment guidelines also. As far as anti-competitive conduct is concerned, these platforms are not showing platform neutrality and exerting market dominance. They have the market power which is being abused,”
the official said, requesting anonymity.
As per the consolidated FDI (foreign direct investment) policy, the e-commerce platforms, funded through FDI, are prohibited to engage in the activity of single-brand or multi-brand retail trading. As part of its probe, the CCI raided the offices of some eight companies, including Cloudtail and Appario, in 2022 that have business links with Amazon.
A lawyer representing “Amazon-preferred sellers” said that the report submitted by CCI could have been incomplete, and that’s why more information has been sought. “In this case, the director general (investigation) will have to submit a supplementary report. The e-tailers are waiting for the report from the CCI,” the lawyer said.
In July, the CCI approved the sale of Amazon India’s largest seller Appario Retail to Clicktech, another seller on the platform. In 2022, the ecommerce giant shut one of its largest sellers in India Cloudtail which the industry experts linked to the CCI probe.
Source: Financial Express
