CCI will be able to continue its investigation on anti-competitive agreements by Amazon and Flipkart: Karnataka HC

“All petitions are dismissed,” Justice P.S. Dinesh Kumar

Karnataka High Court on Friday upheld the Competition Commission of India’s decision to conduct an investigation through its Director-General into whether the e-commerce giants Amazon and Flipkart had entered into anti-competitive agreements.

Justice P.S. Dinesh Kumar dismissed the petitions filed by Amazon Seller Services Pvt. Ltd. and Flipkart Internet Pvt. Ltd. in which the e-commerce companies had questioned the January 13 order of the CCI, which had ordered a probe through its Director-General. With today’s order, the Director-General of CCI can continue the investigation process.

It all started in 2019 when the Delhi Vyapar Mahasangh (DVM), a group representing small and medium scale business owners in the national capital, submitted a plea with CCI accusing them of anti-competitive practices, predatory pricing, exclusive partnerships and preferential treatment of sellers among others.

In October 2019, they alleged that these e-commerce players were giving preferential treatment to a select set of vendors by having indirect control over their operations, especially the exclusive launch of smartphones, which is in violation of the Indian rules for marketplaces, and lodged the complaints under Sections 3 and 4 of the Competition Act.

While the CCI rejected the abuse of dominance claim, it issued an order in January 2020 directing the director-general to conduct an investigation based on the evidence supplied by DVM under Section 3. The high court put the CCI’s investigation on hold because of a writ petition in the Karnataka High Court in February 2020 by Amazon. Following this, the CCI had approached the apex court, which in October 2020 had asked the CCI to approach the High Court. The case had since been going on in the High Court.

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