Amazon, Flipkart Violated Antitrust Laws In India, Investigation Reveals (image/pixabay)
An antitrust investigation by the Competition Commission of India (CCI) found US-based e-commerce giants Amazon and Walmart-owned Flipkart violated local competition laws by giving reference to select sellers and indulging in deep discounting on their shopping website, according to Reuters.
In 2020, CCI reportedly ordered an investigation into the two e-commerce firms for allegedly promoting particular sellers with whom they had business arrangements and giving priority to certain listings.
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The two reports—a 1027-page one on Amazon and a 1,696-page one on Flipkart—dated August 9 found that the two giants have created a system where certain sellers appeared higher in search results, giving them an edge over other sellers, stated the exclusive Reuters report. It further added that each of the alleged anti-competitive practices was found to be true. In identical conclusions on both firms, the reports said, “Ordinary sellers remained as mere database entries.
The reports have not been made public yet. Both Amazon and Flipkart are expected to review the findings of the reports and file any objections before CCI decides on potential fines.
Following a complaint from the Delhi Vyapar Mahasangh, affiliated with the Indian trade body Confederation of All India Traders (CAIT), an investigation was launched into both Amazon and Flipkart. The findings are significant as both the e-commerce majors face criticism for their business practices from small sellers, whose businesses have had a significant impact thanks to the big discounts offered online.
Responding to Reuters, CAIT stated that it would examine the reports and “escalate the matter” with the central government.
The investigation on Amazon claimed that the preferred sellers appeared much higher in the online listings, attracting the customers towards them. The Flipkart report stated that the preferred retailers were given several services, including marketing and delivery, at minimal cost. They were also encouraged by the firm to sell phones with deep discounts amounting to “predatory pricing” and foreclosing competition, said the CCI, adding that the practice is prevalent in other categories of items as well.
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Both Amazon and Flipkart have tried several times to block the investigation; however, in 2021, the Supreme Court stated, “You have to submit and an inquiry has to be conducted,” launching the probe. Previously, both businesses claimed that their practices were in line with Indian laws.
Amazon and Flipkart are the leading players in the country’s e-retail market, estimated to be worth $57-60 billion in 2023 and expected to touch $160 billion by 2028 (as per estimations by the consultancy firm Bain).
