HC okays CCI probe of e-com biggies

The Karnataka High Court on Friday dismissed pleas by e-commerce biggies Amazon and Flipkart challenging the probe ordered by the Competition Commission of India (CCI).

The CCI had ordered a probe in January 2020 against both Amazon and Walmart-owned Flipkart in a complaint filed by the Delhi Vyapar Mahasangh (DVM), representing small businesses. The petitioner had alleged that the e-commerce companies were violating the competition laws while selling smart phones on their platform.

The Delhi Vyapar

Mahasangh had levelled allegations of predatory pricing, deep discounting, preferential seller listing, and exclusive partnerships, among others, against Amazon and Flipkart. The Confederation of All-India Traders (Cait) too had impleaded as a party to the case.

In February, the e-commerce players got stay on the probe from the Karnataka High Court, which found that the ongoing investigation by the Enforcement Directorate (ED) should be first completed before the CCI could initiate a probe. The ED in 2019 had initiated an investigation against Amazon and Flipkart for alleged violation of Foreign Direct Investment laws.

Following this, the petitioners again approached the court asking it to vacate the stay order.

However, on Friday CCI argued that an investigation by the ED under the Foreign Exchange Management Act, 1999 (Fema) does not bar another investigation by the CCI for violations of competition law. It said e-commerce players were twisting the pendency of an ED investigation to ward off CCI's probe.

Responding to the court order, an Amazon spokesperson said: “We will review the judgement carefully and decide on the next steps.”