Amazon and Flipkart together account for nearly 90 per cent market share in the Indian ecommerce space
A deal between Flipkart-Amazon may face a close scrutiny from regulator Competition Commission of India (CCI), according to a report in The Economic Times.
There have been reports that Amazon may be interested in bidding for a stake in Flipkart, India’s biggest homegrown online retailer. The global ecommerce firm, however, is yet to officially state its intent on this subject.
Also read — Amazon may counter Walmart's bid for Flipkart in a bid to gain ecommerce dominance India
“They cannot go ahead with the deal without seeking a prior approval of CCI and that will depend on how well they present their case in a convincing manner that their dominant position will not be misused,” Deepika Sawhney, partner at Corporate Professionals, told the paper.
Amazon and Flipkart together account for nearly 90 per cent market share in the Indian ecommerce space.
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Earlier, Walmart was also believed to be keen to buying 55 per cent of Flipkart through a mix of primary and secondary share purchases, in a deal that could be valued at USD 21 billion.
Under the Companies Act, deals that involve entities with turnover in excess of Rs 6,000 crore or assets of over Rs 2,000 need approval of Competition Commission of India (CCI). This would mean that Flipkart-Amazon deal, if it goes through, would also require CCI's approval as it the merged entity may affect competition.
Also read — Walmart a better bet for Flipkart than Amazon: Report
