The Competition Commission of India has given a major blow to e-commerce giants Amazon and Walmart’s Flipkart on violation of local competition laws Advanced investigations conducted by CCI, the two companies gave a unique preference to some of the sellers on their platforms in part of the anticompetitive conduct.
The CCI’s investigation, on the other hand, looked at complaints that Amazon and Flipkart had built an ecosystem where some sellers — with whom they have commercial relationships — benefited from better search results over those who did not. An investigation found that such practices were anti-competitive and harmful the smaller retailers.
CCI had accused both of preferential listing, deep discounting, and predatory pricing. The CCI said those practices had a “catastrophic impact” on the extant market competition.
The CCI’s decision is a blow to Amazon and Flipkart which are already facing tighter scrutiny in India which has so far been one of their largest overseas markets. The probe was based on a complaint from Delhi Vyapar Mahasangh, which is an affiliate of the Confederation of All IndiaTraders (CAIT) — a body representing millions of small retailers.
The CCI’s conclusions are expected to impact the thriving e-commerce business in India. The judgment has the potential to result in more industry regulations and perhaps clipping the wings of powerful international e-commerce biggies.
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