An Indian court on Friday rejected an appeal by Amazon and Walmart’s Flipkart, which tried to block antitrust investigations into their business practices-a major setback for the two companies.

The Competition Commission of India (CCI) ordered an investigation last year after brick-and-mortar retailers accused US companies of promoting select sellers on their e-commerce platforms and using steep discounts to stifle competition.

After the company challenged, denied wrongdoing, and argued that CCI lacked evidence, the investigation was put on hold for several months, but the court allowed it to continue in June. On Friday, the high court in southern Keranataka rejected the US company’s appeal.

“The appeal is just to ensure that the actions initiated by the CCI…will not be finalized,” a two-judge judge said when he read the verdict in the court.

“The appeal is groundless and should be rejected.”

Amazon and Flipkart did not immediately respond to requests for comment.

“This further strengthens that CCI investigations should continue immediately,” said Abir Roy of Sarvada Legal, who is filing antitrust lawsuits against Amazon and Flipkart on behalf of a group of traders.

The CCI investigation is the latest setback for these companies, and they are also struggling to deal with stricter foreign investment rules and allegations from brick-and-mortar retailers that they are circumventing Indian laws by establishing complex business structures.

© Thomson Reuters 2021

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