Supreme Court To Decide On Clubbing Preferred Sellers’ Cases In CCI Probe Against Amazon, Flipkart On Friday

The Supreme Court on Friday will decide on clubbing multiple cases filed by at least 20 alleged preferred sellers across various high courts, challenging the probe, a move that may impact the Competition COmmission of India's case against Flipkart and Amazon.

The Competition Commission of India sought the transfer of all 24 cases to either the top court or the Delhi High Court and alleged that at least 20 e-tailers attempted to “scuttle the investigation” into anti-competitive practices by these two e-commerce giants.

The matter pertains to a 2020 antitrust probe against Amazon and Flipkart for giving preferred treatment to some e-tailers, including Cloudtail India Pvt., Samsung India Electronics Pvt., Vivo Mobile India Pvt., and Appario Retail Pvt.

The CCI investigation, which concluded in August, alleged that Amazon and Flipkart had broken antitrust regulations by giving preference to certain sellers on their sites. According to the probe findings, both businesses favoured some sellers over others.

The investigation report further pointed out that smartphone manufacturers—Samsung and Vivo—were also accused of working with these e-commerce giants to introduce items only online, in violation of competition laws.

On behalf of CCI, Attorney General for India, R Venkatramani had requested a listing of the case before Dec. 17, as the Karnataka High Court would be hearing petitions filed by Amazon and its sellers.

The Karnataka HC has temporarily halted the competition watchdog actions against Flipkart and Amazon over procedural errors by the Director General, CCI, in the investigation.

On the grounds that DG reclassified sellers initially listed as "third parties" to "opposite parties" without seeking prior approval from the CCI, which contravened standard procedures.

During the course of the investigation, CCI has searched several e-tailers, including Samsung, Cloudtail, and Appario Retail, in 2022, seizing their data and financial records. 

Samsung, for instance, in its recent petition claimed that CCI wrongfully detained employees and seized data during 2022 searches; hence, investigating findings should be quashed, according to a Reuters report.

“Searches in the case of Samsung and others were conducted in line with competition laws and with due permission of the court magistrate, so claims of breach of confidential data, etc., are frivolous, a CCI source told NDTV Profit.

But legal experts have different views. They are of the view that legal precedents have not been followed in the course of the investigation. "CCI violated the rights of third parties, who were assisting them in the case, a legal expert tracking the case said.

Once a case is being consolidated, the court may seek a reply from CCI on all the grounds the 24 petition is being filed. However, contravention of the standard procedure may weaken the case for CCI, experts noted.

CCI has launched a probe following the complaint filed by Delhi Vyapar Mahasangh, a traders’ association, alleging that Amazon and Flipkart preferred select sellers to boost their products’ visibility.