CCI in­ves­ti­ga­tion against Ama­zon, Flip­kart stayed

HC gives par­ties 8 weeks to re­spond

Business Standard - - FRONT PAGE - PEERZADA ABRAR

In a ma­jor re­lief to e - com­merce ma­jors Ama­zon In­dia and Flip­kart, the Kar­nataka High Court on Fri­day granted an i nterim stay on the Com­pe­ti­tion Com­mis­sion of In­dia’s (CCI’S) or­der of an in­ves­ti­ga­tion into some of the firms’ busi­ness prac­tices.

The or­der was de­liv­ered by Jus­tice P S Di­nesh Ku­mar on a pe­ti­tion filed by Ama­zon, seek­ing an in­terim stay on the CCI probe or­der, af­ter hear­ing the mat­ter over the past three days. The court has granted the re­spon­dents eight weeks to file a counter.

“While we wel­come and respect the de­ci­sion of the Hon’ ble High Court of Kar­nataka, this is just a step in the le­gal process. We are con­fi­dent about our com­pli­ance,” Ama­zon said on a state­ment fol­low­ing the HC or­der.

Ama­zon had made CCI, the Delhi Vya­par Ma­hasangh (DVM) and Flip­kart as re­spon­dents.

The CCI had or­dered the probe based on a com­plaint filed by trade body DVM last month, which al­leged that these play­ers were giv­ing deep dis­counts on on­line sales of smart­phones, apart from cherry-pick­ing sell­ers.

“This is a big re­lief to both com­pa­nies and the fact that the court gave this re­lief af­ter hear­ing ar­gu­ments for three days, shows that prima fa­cie Flip­kart and Ama­zon lawyers have been able to con­vince the court that the said CCI or­der was passed in an ar­bi­trary man­ner,” said Sal­man Waris, man­ag­ing part­ner at New Delhi-based law firm Tech­legis Ad­vo­cates & Solic­i­tors. He said, the in­terim stay sup­ported Ama­zon’s po­si­tion that CCI or­der was “un­rea­son­able, un­war­ranted, ar­bi­trary and mala-fide.”

It was an ex­tra­or­di­nary scene in the court, where the le­gal coun­sels of archri­vals Ama­zon and Flip­kart were on the same side, ar­gu­ing passionate­ly against the CCI’S probe.

On Fri­day, the court com­mented about a 2018 case in­volv­ing the All In­dia On­line Ven­dors As­so­ci­a­tion (AIOVA) and Flip­kart, where the traders’ as­so­ci­a­tion ac­cused Flip­kart of abus­ing its dom­i­nant po­si­tion. The CCI had in­vited Ama­zon to present its views as a third-party or ex­pert. CCI had said at the time that Flip­kart or Ama­zon had not vi­o­lated any law.

The High Court found it strange that the CCI had changed its views. Ac­cord­ing to sources, Ama­zon has re­peat­edly gone out of its way to as­sist CCI to make it un­der­stand t hat t here is noth­ing that the com­pany is do­ing that can be chal­lenged un­der the com­pe­ti­tion law.

“CCI or­dered this in­ves­ti­ga­tion with­out even call­ing the com­pany (Ama­zon). It was an ex-parte or­der, and, thus, the firm chal­lenged it,” said a per­son fa­mil­iar with the de­vel­op­ment.

On Fri­day, Flip­kart’s coun­sel’s main con­tention re­volved around Sec­tion 19 (3) of the Com­pe­ti­tion Act, which stip­u­lates six pa­ram­e­ters that CCI needs to con­sider while eval­u­at­ing if a com­pany has flouted norms. These in­clude cre­ation of bar­ri­ers to new en­trants, driv­ing ex­ist­ing com­peti­tors out of the mar­ket and im­prove­ments in pro­duc­tion or dis­tri­bu­tion of goods or pro­vi­sion of ser­vices. Coun­sel rep­re­sent­ing Flip­kart on Fri­day said that some of those pa­ram­e­ters were not con­sid­ered by the CCI while or­der­ing for a probe.

Mean­while, the Con­fed­er­a­tion of All In­dia Traders (CAIT) has said that the court stayed the CCI probe as the En­force­ment Direc­torate (ED) has al­ready ini­ti­ated in­ves­ti­ga­tion into Flip­kart and Ama­zon’s ac­tiv­i­ties that are al­leged to be in con­tra­ven­tion of the for­eign di­rect in­vest­ment pol­icy.

Both CAIT and DVM said that they are con­sult­ing with their lawyers to file an ap­peal.

Praveen Khan­del­wal, CAIT na­tional sec­re­tary gen­eral, termed the de­vel­op­ment “un­for­tu­nate and un­ex­pected”, adding that the traders’ body would push the gov­ern­ment to ex­pe­dite the ED probe against these play­ers to ex­pose mal­prac­tices.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.