On Friday, an Indian court rejected Amazon and Walmart’s Flipkart’s request to withdraw antitrust investigations into US companies’ business practices, which dealt a blow to their key growth markets.
The Competition Commission of India (CCI) announced an investigation in January 2020, after a group of traders complained and accused these companies of promoting some “preferred sellers” and harming the businesses of small sellers.
Last year, after Amazon and Flipkart questioned that CCI had no evidence that e-commerce giants were harming competition, the court suspended the investigation.
On Friday, Judge PS Dinesh Kumar of the Southern Karnataka High Court stated that he rejected the petitions of Amazon and Flipkart and rejected any further relief from them.
“It is unwise to prejudge the problem at this stage… and sabotage the investigation,” Kumar wrote in his 51-page order.
Amazon said it would “review the order carefully and then decide on the next step.” Flipkart did not immediately respond.
Abir Roy, a lawyer for the Indian trade group Delhi Vyapar Mahasangh, told Reuters that the judge’s decision actually paved the way for the reopening of an investigation that had been shelved since February 2020. The road was leveled.
However, these companies may appeal the judgment.
When the competition regulator ordered an investigation, it listed four suspected anti-competitive practices. These are phones exclusively launched by e-commerce companies that promote preferred sellers on their websites, heavily discounted practices, and prioritize certain seller lists.
The CCI investigation will be the latest setback for these companies, which have also been struggling with stricter foreign investment rules and have been facing allegations from brick-and-mortar retailers for years to circumvent Indian laws by establishing complex business structures.
In February of this year, a survey conducted by Reuters based on internal Amazon documents showed that the American company has been helping a small number of sellers to prosper on its Indian platform for many years, offering them discounts and helping a large technology company reach a special deal. .
As the competition watchdog tried to restart the investigation, it told the Karnataka court in March that the Reuters report confirmed the evidence it had received against Amazon.
In response, the company stated that it “will not provide preferential treatment to any sellers” and told the court. It disagreed with the Reuters report, which should not be taken as evidence.
© Thomson Reuters 2021