Amazon, Flipkart Preferred Sellers Trying To ‘Scuttle’ Investigation: CCI To Supreme Court

The Competition Commission of India has sought consolidation of multiple proceedings filed by at least 20 e-tailers of Amazon and Flipkart at various high courts alleging that they attempt to “scuttle the investigation” against the two e-commerce giants.

The matter pertains to a 2019 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.

Underscoring the grounds for seeking consolidation, the CCI stated before the apex court that multiple proceedings initiated before the high courts aim to 'stall' the proceedings before the regulator.

The document notes that cases filed before different high courts are an "attempt to scuttle the well-established procedure of investigation laid down under the Act," and if allowed to continue, it will lead to "absurdity."

The CCI further noted that such an attempt to delay would benefit the contravening parties and will act as a detriment to healthy competition in the relevant markets and to crores of consumers.

The competition watchdog pointed out that writs filed by e-tailers are based on entirely misconceived issues of law, resulting in grave prejudice to the regulator, “as its enquiry has been halted, which is affecting the public and e-commerce sector as a whole,” the petition reads.

NDTV Profit has reviewed a copy of the petition filed before the top court. The case will likely be coming up before the Chief Justice of India, Sanjiv Khanna, on Monday.

The commission has stated that all arguments that are being made before various high courts can be raised before the commission itself. 

It has been contended that the non-confidential version of the investigation report has been shared with the parties involved, and such parties can object wherever it is deemed fit. 

An email sent to Amazon and Flipkart remained unanswered.

In addition, it has been alleged that the cases intend to restrict CCI’s investigation only against those parties that have been identified by the regulator for the purposes of an investigation. The CCI noted that this could potentially lead to a situation where the DG, despite finding evidence, is unable to thoroughly investigate the matter, which would be contrary to the Act's structure and the interests of justice.

The plea seeks that these matters, which are presently being heard by 6 different high courts across the country, be combined and heard by either the Supreme Court or the Delhi High Court.

The issue dates back to 2019 when the Delhi Vyapar Mahasangh, an organization of smartphone and related accessories traders,  made serious allegations of anti-competitive practices against major e-commerce platforms, Amazon and Flipkart.

It was alleged that almost all sales on these platforms are done by their own preferred sellers which has led to the closure of businesses for lakhs of other sellers on these marketplaces.

In 2020, the regulator ordered an investigation into the alleged use of exclusive arrangements, deep discounting, and preferential listing by Amazon and Flipkart as an exclusionary tactic to eliminate competition.

However, the issue has come to a standstill since then by virtue of stay orders passed by the high courts on the investigation process.