CCI orders probe against Amazon, Flipkart.

CCI orders probe against Amazon, Flipkart over discount practices.

India’s Competition Commission of India (CCI)   has ordered to investigative team to survey online shopping sites mainly Amazon and Flipkart about their discounting practices, on exclusive brand launches on their platforms and they have as stated offered to certain mobile phones sellers and so on.

On Monday, the Competition Commission of India (CCI) said it “is that opinion that there occurs an evidential case which requires an investigation”. The antitrust body directed its director-general, who investigates these types of cases, to submit the report within 60 days. The order come to CEO of Amazon Jeff Bezos’ visit to India this week, during which he is likely to meet key policymakers including our honorable Prime Minister Narendra Modi. Jeff Bezos said it would work with the CCI to address the concerns. “We welcome the amazon in India and the opportunity to address statement made about Amazon; we are fearless in our compliance, and will cooperate entirely with CCI”.

Walmart-owned Flipkart said it was reviewing the order and that the company was fully compliant with all applicable laws. CCI’s order follows a complaint filed by the Delhi "Vyapar Mahasangh", a group representing brick and mortar small businesses. The group had alleged that some “preferred sellers” on the platforms were “in some way or some other way they connected to Amazon and Flipkart through common investors, directors, shareholding of the nation. The CCI said claim that both platforms had asked sellers to induce a part of the discounts offered during big sale events like Flipkart’s Big Billion Days and Amazon’s Great Indian Festival, End of Season Sale to warranted an investigation.

 

“It needs to be investigated whether the alleged exclusive preparation, deep-discounting and special listing by the OPs (opposite parties) are being used as an exclusionary tactic to rule out competition and are resulting in an appreciable adverse effect on competitor’s business,” the CCI said. The CCI noted that exclusive launches of select mobile phones, coupled with preferential treatment for some sellers and discounting Strategy of platforms, could create an ecosystem that might have an make a big effect on competition.

It observed that only few online sellers were selling mobile phones launched on Amazon and Flipkart and that “it can be at first face conclude that there appears to be exclusive partnership b/w smartphone manufacturers and ecommerce business man for exclusive launch of smartphone brands”.

 

The CCI order noted that Flipkart newly launched 67 mobile phones and Amazon 45 mobile phones on their platforms in 2018. “Competition on the platforms may get influenced in favor of the entire brands and sellers, through higher discounts and privileged ", said the order, adding that allegations warranted an integrated investigation of vertical agreements and their effect on competition. The competition switch, however, said it would not look into statement of joint control against the companies, as the Competition Act"does not provide for inquiry into or investigation into the cases of collective dominance."