The Competition Commission of India (CCI) ordered the investigation against the companies in 2020 for allegedly promoting select sellers on their e-commerce platforms and using business practices that stifle competition.
Confederation of All India Traders (CAIT), the industry body for retail traders, has written to the Competition Commission of India (CCI) seeking the urgent resolution of the longstanding Delhi Vyapar Mahasangh case involving alleged anti-competitive practices of Flipkart and Amazon.
“Passage of every month would mean allowing the anti-competitive practices to the tune of Rs 25,000 crore by Flipkart and Amazon and a corresponding loss of livelihood of retailers and small traders,”
wrote Praveen Khandelwal, National General Secretary, CAIT, in a letter to the CCI.
In 2019, Delhi Vyapar Mahasangh (DVM), a union of micro, small and medium-sized enterprises (MSMEs) engaged in the trade of mobile phones and related accessories, filed a case against two e-commerce giants, Amazon and Flipkart. DVM accused two e-commerce giants of engaging vertical agreements with preferred sellers causing foreclosure of competition.
CAIT alleged that “almost all” sales on the aforementioned e-commerce platforms are carried out by their own sellers, “and the millions of other sellers registered on their platforms are just to show that they are operating an e-commerce marketplace.”
The letter further claimed that Amazon and Flipkart could stall the investigation for more than 20 months by filing frivolous litigations and requested the competition watchdog to take prompt action.
In 2020, CAIT had already 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 e-commerce 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: Business Standard