CCI started an antitrust investigation into Amazon and Flipkart. Now, the firms are fighting back.
What Happened?
Sources and a legal filing viewed by Reuters said that Flipkart and Amazon.com Inc have filed legal challenges against the restarting of an antitrust investigation into these companies’ business practices. Flipkart has said that the decision by the Karnataka court to allow the investigation to resume was erroneous and must be put on hold. Sources told Reuters that both the companies are likely to heard by a two-judge panel this week.
These legal challenges from the e-commerce giants come after sources told Reuters that CCI will be expediting a restarted probe into allegations of anti-competitive behaviour at Amazon and Walmart. Sources also said that the CCI plans to demand information from them related to the allegations “as quickly as possible”.
The Investigation
Last year, the CCI announced an investigation into Amazon and Flipkart after a complaint filed by the Delhi Vyapar Mahasangh (DVM). The complaint accused Flipkart and Amazon of giving preferential treatment to a small group of sellers on its India platform. The Confederation of All India Traders (CAIT) and DVM alleged that Amazon had a direct relationship with the seller Cloudtail and was giving it preferential treatment along with another seller, Appario.
The complaint also accused of the companies having exclusive deals with phone brands and deep discounting related to products. The allegations also include predatory pricing and cherry-picking sellers, as well as circumventing foreign investment rules that impact e-commerce.
Zooming Out
Until now, both the companies have denied any wrongdoing, but it looks like that is not going to stop CCI. Sources told Reuters said that the CCI is speeding up all cases involving big technology companies, including by deploying additional officers for some cases and working to more stringent internal deadlines.
But why the rush? “Cases involving digital firms are getting a priority at CCI as they can have significant impact on the economy and Indian startups,” one of the source said. So, will the companies be able to stay the investigation again, or what kind of things will CCI uncover in this probe? We have to wait and see…
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