ETtech Explainer: CCI's antitrust probe into Amazon, Flipkart

The Supreme Court on Monday transferred all the petitions related to alleged anti-competitive practices by Amazon and Walmart’s Flipkart ecommerce platforms to the Karnataka High Court’s single-judge bench. The HC’s Dharwad bench will now hear the transferred and pending petitions in the case.Here’s a detailed look at the case:

The genesis of the case goes back to 2019 when traders body Delhi Vyapar Mahasangh, an affiliate of the Confederation of All India Traders (CAIT), petitioned the Competition Commission of India (CCI) against the ecommerce giants, saying that they favoured certain sellers over others. Small traders claimed malpractices on their part such as deep discounting, preferential treatment to select sellers and exclusive tie-ups.The matter was escalated to the federal government. In January 2020, the CCI called for a probe into the companies, asking the Director General to look into the issue.

Also Read: ETtech Explainer: Timeline of CCI’s antitrust probe into Amazon and Flipkart

The investigation was concluded in August 2023, and the DG, in its report, accused Amazon and Flipkart of engaging in anti-competitive practices.

Preferential listing: The firms were found to be giving preference to a handful of sellers on their shopping websites whom they had business arrangements with.

Exclusive product launches: A few sellers, especially for major smartphone brands like Samsung, Xiaomi, Motorola, Realme and OnePlus, were availing exclusive product launches on these platforms, which hurt small sellers.

Deep discounting: The etailers were found to be giving priority to certain listings, and steeply discounting products. The CCI also noted that an ecosystem was built “wherein no seller other than its preferred seller can survive.”

Search fudged: The report stated that in this ecosystem preferred sellers are prioritised in search results, with the rest being relegated to just database entries.

Challenges

The ecommerce giants challenged the verdict in various lower courts, denying any wrongdoing and mounted legal challenges, even going up to the Supreme Court against the investigation. They said the antitrust body did not have enough evidence to pursue the matter.

Vendors on their platforms have also filed almost two dozen lawsuits across five Indian high courts, as have Samsung and Vivo, to block the investigation.