The Supreme Court of India, on Monday, given his final verdict in the CCI probe and maintains the stand that the antitrust investigations into the business practices of Amazon.com and Walmart-owned Flipkart must continue. This is a big blow for the two eCommerce giants, who had asked the court to suspend the ongoing CCI probe against them.
Last year, the Competition Commission of India (CCI) ordered an investigation into the companies for allegedly favoring selected sellers on their eCommerce platforms and using business practices to stifle competition.
Both the companies deny any wrongdoing and have filed legal challenges at lower courts and at Supreme Court against the investigation. They claim that the CCI didn’t have sufficient evidence to investigate the matter.
The Chief Justice N.V. Ramana of the Supreme Court led a three-judge Supreme Court bench that said companies such as Flipkart and Amazon should be open to such investigations.
CCI Investigation Against Amazon, Flipkart: Big Picture
- This issue dates back to October 2019, when the Delhi Vyapar Mahasangh, a group representing small- and medium-sized business owners in the capital, filed a complaint with CCI against two companies. They were accused of anti-competitive practices and predatory pricing, as well as preferential treatment for sellers.
- The timeline of the matter is constantly being maintained by Dazeinfo. You can visit this link to understand how the complete development in the matter.
- This is a significant setback for Flipkart and Amazon, as the Supreme Court appeal was considered the last legal recourse to stop the CCI from pressing ahead with its investigation.
“We expect organizations like Amazon and Flipkart, big organizations, they have to volunteer for inquiry and transparency. We expect that and you don’t even want (an) inquiry. You have to submit and inquiry has to be conducted.” Justice Ramana told the court.
- Companies are also facing tougher eCommerce regulations and investigations from the country’s financial crime agency regarding alleged violations of foreign investment laws.
Food For Thought
Last month, as reported by Dazeinfo, both Flipkart and Amazon made a failed attempt to stall the CCI investigation by appealing to the High Court of Karnataka.
The resistance by Flipkart and Amazon against the CCI investigation also raises many questions. Flipkart is already staring at one of the biggest fines in Indian history by ED on a tech company; Amazon is in hot water too. It would be interesting to see if the CCI investigation leads to a pandora box or ends up finding with a slap on the wrist.