The petition before the competition commission of India (CCI) was filed by the Delhi Vyaparsangam alleging that the e-commerce platforms like Amazon, Flipkart enter into vertical agreements with the preferred sellers. The CCI has directed the Director General to conduct investigation and submit the report within 60 days. Against the order of the competition commission of India to probe the charges leveled against amazon for alleged violation of competition law, Amazon had filed a plea before the Karnataka High court to quash the same.
Brief facts:
In the year 2019, the Delhi Vyaparsangam filed a petition before the Competition commission of India against the giant online e-commerce platforms, Flipkart and Amazon. The petition contended that both the amazon and flipkart has violated the provisions of competition law. The petition stated that amazon has entered vertical agreements with the preferred sellers which has an adverse effect on the non-preferred sellers. The petition further contended that these online platforms influence the prices of the products by providing discounts to the sellers. The petition charged the amazon stating that it practices preferential listing in which the products of the preferred sellers are listed in the first few pages of the search results and the products sold by the non-preferred sellers are listed in the later pages. This leads to the foreclosure of the non-preferred sellers. The petition further contends that the amazon has a market share of 36% and whereas flipkart has more than 50% which has created high entry barriers for the new entrants. Owing to the major market share the petition contended that both the platforms have abused its dominance over the market. Upon the perusal of the documentary evidence provided by the petitioner and after analyzing the public information, the competition commission of India stated that there is a prima facie case to initiate investigation against the e-commerce platforms, Amazon and Flipkart. The Competition Commission of India directed the Director General to conduct investigation and submit a report within a period of 60 days from the receipt of the order.
Aggrieved by the said order, the Amazon has filed a writ petition before the Karnataka High Court praying to quash the order passed by the competition commission of India. The counsel appearing on behalf of the Amazon stated that the order of the competition commission has caused irreparable loss to the Amazon and further stated that the competition commission of India did not consider the market study report that was published by CCI itself. He argued that these online platforms has benefited a large number of consumers and hence has attracted new investors into the market.
Key features:
1. The petition stated on the allegation of preferential treatment that various agreements are entered only between the manufacturer and the seller. Amazon merely acts as a platform and as such does not enter into agreement with the sellers.
2. The petition contended that the findings of the competition commission of India are not in accordance with the law and hence is liable to be set aside.
3. The petition also alleged that amazon was not provided with reasonable opportunity to be heard.
4. The petition stated that the order of the CCI did not resonate as to how deep discounting preferential agreement and tie-ups amounts to anti-trade practices and consequently violation of section 3(4) of the competition Act.
5. The petitioner further contends that the CCI did not determine the violation of competition law which is to be determined before the investigation.
The said writ petition was listed before Justice PS Dinesh Kumar and had posted the petition for further hearing on February 13, 2020. The High Court while grating stay on the probe initiated by the competition commission of India, has directed the CCI and the Confederation of All India Traders (CAIT) to file their responses within a period of eight weeks. The court further opined that the investigation initiated by the Enforcement Directorate against the Flipkart and Amazon for allegedly violating the Foreign exchange law to be completed first.
Edited by J. Madonna Jephi
Approved & Published – Sakshi Raje
Reference:
1. Case no. 40 of 2019, Competition Commission of India, Order dated 13th January, 2020.
2. Bar and Bench, Karnataka HC stays CCI order calling for probe into alleged anti-competitive conduct by Amazon,http://www.google.com/amp/s/www.barandbench.com/amp/story/news%252Flitigation%252Fbreaking-Karnataka-hc-stays-cci-order-calling-for-probe-into-alleged-anti-competitive- conduct- by-amazon, (last visited on 14th February, 2020).
