The Competition Commission of India started an antitrust probe into Amazon and Flipkart in January 2020. However, a Reuters report says that the commission is expediting its probe into the e-commerce giants.
Another Reuters report presented evidence that shows Amazon supporting a handful of sellers and even flouting the foreign investment rules. Walmart-owned Flipkart has also been accused of planting deep discounts to get rid of the competition.
What’s The Indian Antitrust Case Against Amazon And Flipkart?
In January 2020, the Competition Commission of India (CCI) announced its investigation into Amazon and Walmart-owned Flipkart. The case was based on a complaint filed by an Indian trader’s group.
This group claimed that Amazon and Flipkart are giving preferential treatment to a handful of sellers. If that’s true, it would mean that the retailers would be at a loss, even if they were to partner with the e-commerce giants.
Amazon and Flipkart reached the court and managed to put a hold on the probe. However, on June 11, the Karnataka High Court dismissed the e-commerce platform’s plea, giving CCI a free hand to make an antitrust case against Amazon and Flipkart.
Immediately after this, another report states that the competition watchdog is now expediting the case. However, it is expected that Amazon and Flipkart will appeal against the case again. Nonetheless, the report says the CCI will ask Amazon and Flipkart for information “as quickly as possible.”
If that’s the case, there is a strong chance a court will allow CCI to look into the matter. While Amazon and Flipkart say the watchdog lacks evidence, a Reuter’s report from February says otherwise.
Who Else Is On The CCI Radar?
Aside from Amazon and Flipkart, the Competition Commission of India is told to be going after Google. It is reported that the search engine giant has used its Android platform dominance in the smart TV market.
Some of the practices of MakeMyTrip and Facebook-owned WhatsApp are also on the CCI radar. The Indian government and WhatsApp tension further intensified over the ‘traceability‘ feature in the new IT rules.
What If Amazon Lost The Antitrust Case In India?
Since its establishment in 2009, the CCI has resolved over 650 cases. It is also known for imposing some of the highest fines in the world. For example, in 2018, the watchdog slapped Google with a $21 million fine for search bias.
If Amazon and Flipkart are found guilty, the CCI could penalize or even stop the companies operating in India. According to a 2019 CCI report, India is the fastest-growing e-commerce market in the world.
The same report also states that an “overwhelming majority of the respondent sellers and restaurants raised concern regarding platform neutrality.” It also talks about websites giving preferential treatment to ‘preferred sellers.’
All things considered, the Flipkart and Amazon antitrust cases in India can harm the companies’ reputations. But, on the other hand, E-commerce platforms benefitted during the COVID-19 lockdowns, as most shopping shifted online.
On the flip side, trade bodies have been crying foul over Amazon and Flipkart’s policies for a long time now. So if the case goes ahead, there’s also a possibility that the government might come up with new e-commerce rules, just like the recent IT rules.