India’s antitrust regulator, the Competition Commission of India (CCI), is considering taking its case against Amazon and Flipkart to the Supreme Court.
High Courts receive dozen writ petitions
This move comes after multiple high courts, including those in Karnataka, Telangana, Madras, and Kolkata, received over a dozen writ petitions from sellers challenging the CCI’s investigation report. The report found that the ecommerce platforms gave preferential treatment to select sellers.
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Narasimhan, an advocate at the Madras High Court, said the transfer petition would help address multiple queries from various parties in different courts. He noted, “The longer these cases drag, the small sellers and MSMEs who are dependent on the ecommerce ecosystem could be severely impacted.”
This development follows a report submitted in August by the CCI’s director general of investigation (DGI), which confirmed suspected violations of competition law by Amazon and Flipkart, particularly regarding preferential treatment and exclusive product launches. Appario Retail Private Ltd., once one of Amazon’s largest sellers, challenged these findings in the Karnataka High Court in September, alleging procedural violations by the DGI.
On September 27, the Karnataka High Court granted an interim stay on the CCI’s proceedings until November 20, after hearing three identical petitions from sellers.
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CCI claims, violating laws results 10% turnover to companies
The CCI’s findings indicate that Amazon and Flipkart violated competition laws by favouring select sellers on their platforms. The watchdog has sought financial statements from both companies to determine penalties, which could amount to up to 10% of their global annual turnover under the 2023 amendment to competition law.
This scrutiny comes amid growing regulatory attention towards ecommerce platforms in India. Last month, a Madras High Court lawyer wrote to the DPIIT Secretary, alleging that Flipkart was offering selective waivers at the product level, creating a “skewed and non-competitive environment.” In August, Union Minister Piyush Goyal criticised Amazon’s “predatory pricing policies,” expressing concerns over the rapid growth of ecommerce firms in India.
Additionally, the Ministry of Corporate Affairs has proposed a draft digital competition bill aimed at regulating major entities based on various factors, including turnover and user numbers, to address anti-competitive practices by big tech companies.
