Documents found a month ago during raids on the Indian offices of Amazon and Flipkart are being examined.
The investigation arm of the Competition Commission of India (CCI) is reviewing documents that suggest financial dealings between leading ecommerce companies and their preferred sellers, The Economic Times reported, citing sources.
The investigation should have been completed by the first half of June, but the Investigation arm sought more time from the Commission to review the documents.
“Some important data has been seized during the raids and the same needs to be analyzed. Hence, additional time has been sought”,
said a person with direct knowledge of the matter.
According to a second source, it's about "financial linkages" between the digital platforms and the online vendors.
“Deep discounting is a key antitrust issue that CCI is probing and the documents pertaining to the acquisition costs of the goods will provide more insights on who is subsidising these goods,”
said the person.
Also, since some of the ecommerce companies themselves own shares in the online vendors, CCI is examining the terms of such equity investments.
This is the first case not related to cartelisation where the antitrust regulator has used its powers of search and seizure.
Members of the Confederation of All India Traders (CAIT) had in 2020 approached the CCI alleging abuse of market dominance and competition law violation by Flipkart and Amazon.
The petition alleged platforms forced sellers to become preferred vendors, provided preferred access to these vendors, and promoted only these preferred vendors on their platforms, which impacted non-preferred sellers.
It was also alleged that ecommerce platforms owned stakes in some online vendors on their platform, which was also not allowed under the foreign investment rules for ecommerce.
The current foreign investment policy provides that ecommerce entities providing a marketplace will not directly or indirectly influence the sale price of goods or services and shall maintain a level playing field.
Source: The Economic Times
