Karnataka High Court allows competition panel probe into e-tailers

BENGALURU:  In a major win for small retailers, who have been alleging that foreign firms are violating the Competition Act and Foreign Direct Investment Act, the Karnataka High Court on Friday allowed the Competition Commission of India (CCI) to probe the anti-competitive practices by e-commerce giants Amazon and Flipkart.

The HC dismissed the e-tailers’ petitions seeking quashing of a probe ordered by the CCI last January based on a complaint by the Delhi Vyapar Mahasangh. The e-comm giants are accused of making special agreements with select sellers, having stakes in Indian companies selling on their platforms, and deep discounting. 

Earlier, the CCI had approached the Supreme Court, which told the Karnataka HC to decide on the matter in six weeks. Amazon told TNIE that it will review the judgment and decide on the next step. Flipkart didn’t respond to queries.

Senior lawyer Abir Roy, who appeared for the Delhi Vyapar Mahasangh, said the CCI can continue the ongoing probe against the companies. However, the e-comm giants may appeal before a larger bench. 

The CCI’s lawyers informed the court that it was in possession of emails exchanged between Amazon, Flipkart and sellers offering to incur a part of the discounts during big sale events as well as allegations of common directors at Amazon, Flipkart and seller firms like Cloudtail, Omnichannel Retail, Appario which merits investigation. 

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