Amazon and Flipkart face an antitrust investigation in India

Joanna Estrada
January 15, 2020

Competition Commission of India (CCI), the local antitrust body, highlighted a wide gamut of issues, including the arrangements between smartphone vendors and e-commerce platforms to sell certain handsets exclusively online, and e-commerce firms apparently giving preferential treatment to certain sellers, and said these allegations merit an investigation.

India ordered an investigation of Amazon.com Inc and Walmart's Flipkart on Monday over alleged violations of competition law in the latest setback for US e-commerce giants operating in the country. But just hours after his comments, the commission on Monday said it would be investigating Amazon and Flipkart, noting allegations of deep discounting and promoting "preferred sellers". Flipkart was reviewing the document, a spokesperson said, adding that the company was fully compliant with all applicable laws and FDI regulations.

Amazon said: "We welcome the opportunity to address allegations made about Amazon; we are confident in our compliance, and will co-operate fully with the CCI".

The remarks come ahead of a visit by Amazon's CEO Jeff Bezos to India this week - one likely to marked by much tension with the country's small business owners planning protests in 300 cities as they step up their campaign against what they see as unfair business practices.

The complaint against the companies was filed by Delhi Vyapar Mahasangh, a group representing small- and medium-sized businesses. They include exclusive launch of mobile phones, preferred sellers on the marketplaces, deep discounting and preferential listing/promotion of private labels.

The CCI said its investigation unit should complete the probe within 60 days, but typically such cases have taken far longer.

Walmart in 2018 invested $16 billion to buy a majority stake in India's Flipkart, its biggest ever deal.

The decision to investigate Amazon India and Flipkart would add to the headache of both the e-commerce firms that faced a major regulatory hurdle in the country previous year. "It is alleged that Amazon and Flipkart are able to cross-subsidise because of the huge amount of funding received from their investors, which has resulted in incentives that allow pricing below cost on their platforms, through their sellers, resulting in creation of high entry barriers and high capital costs for any new entrant in the market", the order said.

Other reports by Click Lancashire

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