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The probe, initiated by the CCI, found evidence suggesting that both e-commerce giants engaged in practices such as exclusive arrangements, deep discounting, and preferential listings on their platforms. These practices are alleged to violate competition laws and harm smaller sellers.
The investigation began after the Delhi Vyapar Mahasangh (DVM), a group of small traders, accused the two e-commerce giants of unfair business practices. The key allegations include:
- Special treatment for preferred sellers: Platforms allegedly favor sellers like Cloudtail and Appario on Amazon, and Omnitech Retail on Flipkart, by offering them lower fees and higher visibility.
- Deep discounts: These sellers are accused of receiving discounts that make it hard for smaller sellers to compete.
- Promoting private label brands: Amazon and Flipkart are said to sell their own products through these preferred sellers, pushing other brands aside.
- Exclusive deals: Both platforms are alleged to tie up with manufacturers to sell exclusive products.
The CCI also highlighted the platforms’ significant market shares—Amazon at 36% and Flipkart at 53% in the Q1 2019 smartphone market—and alleged abuse of dominance, including predatory pricing and unilateral contract terminations.
The CCI found evidence to support these claims and launched an investigation under Sections 3(4) and 4 of the Competition Act, which deal with anti-competitive practices and abuse of market dominance. However, the regulator dropped claims of “joint dominance” since current laws do not recognise it.
Following the CCI’s findings, Amazon and Flipkart filed separate petitions in various high courts, challenging the investigation. The CCI, in response, has urged the Supreme Court to transfer all related cases to a single judicial body, either the Supreme Court or the Delhi High Court. The regulator contends that conflicting rulings from different high courts could undermine its statutory role in ensuring fair competition.
The Supreme Court’s decision on the matter is expected to have significant implications for the ongoing probe and the regulatory framework governing e-commerce in India.
