India on Monday ordered a large-scale investigation into Flipkart and Amazon India after a retail trade group claimed the e-commerce giants were indulging in anti-competitive practices to gain a foothold in the country.
The Competition Commission of India (CCI), the local antitrust agency, highlighted a wide range of issues, including agreements between smartphone vendors and e-commerce sites to sell some handsets exclusively online, and e-commerce firms that apparently give certain sellers preferential treatment, and said that these allegations warrant investigation.
The CCI also asked the Chief Executive Officer to examine whether Amazon India and Walmart give deep discounts on their markets and promote their own private labels.
“The informant alleged that Flipkart and Amazon have established an inherently anti-competitive model for e-commerce,” the CCI said.
A spokesperson for Flipkart told TechCrunch the company was reviewing the paper.
All India Trader’s Director General Orders for Report Within 60 Days
“The Flipkart group is fully compliant with all applicable laws and FDI regulations. We take pride in democratising e-commerce in India and giving market access to lakhs of MSMEs, sellers, artisans and small businesses, making quality and affordable goods available to consumers through our transparent and efficient marketplace while creating lakhs of jobs,” the spokesperson added.
“We welcome the opportunity to address allegations made about Amazon. So, we are confident in our compliance, and will cooperate fully with CCI,” an Amazon spokesperson told TechCrunch.
The matter was brought to the CCI by Delhi Vyapar Mahasangh, a group that represents micro and small enterprises. The decision to prosecute Amazon India and Flipkart will add to the challenge of both e-commerce companies. It faced last year in the country with a big regulatory hurdle. Amazon has invested $5 billion north into its India market, while in 2018 Walmart purchased a majority stake in Flipkart for $16 billion. Both companies consider India one of their most important overseas markets.
The move comes days before Amazon Chief Executive Jeff Bezos visit. He set to kick-start an event in New Delhi on Wednesday focused on small businesses.
An inquiry into Amazon and Flipkart’s allege anti-competitive practices. It is the “first practical long-awaites step” in understanding the disadvantages small traders face today. So, it states by Praveen Khandelwal, Confederation of All India Traders ‘ Secretary-General. It is a body that represents 70 million traders and 40,000 trade associations in India. The Director General orders to conclude the inquiry and submit the report within 60 days.
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