Amazon gets stay against CCI investigation
The Karnataka High Court has ordered a stay on the competition watchdog’s investigations against e-commerce biggies Amazon and Flipkart.
The court felt that the ongoing investigation by the Enforcement Directorate (ED) should be first completed before the Competition Commission of India could initiate a probe. Last year, the ED had initiated an investigation against Amazon and Flipkart for alleged violation of foreign direct investment (FDI) laws. The court opined that FDI violations being in the realm of the ED and the adjudicating authority under the Fema, the case of CCI vs Bharti Airtel would apply to this case as well and the ED would have to give its report before the CCI could proceed with the matter.
The HC also noted that while the CCI had asked Amazon for its comments in a previous case filed by All-India Online Vendors’ Association, it should have also called the parties in the current case.
Amazon had filed a writ petition in the court on Monday against the probe ordered by CCI in January. The Competition Commission had ordered the probe against both Amazon and 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.
In its plea, Amazon had sought "quashing and setting aside" of the CCI's probe order dated January 13, claiming that the fair competition watchdog passed orders against the company without applying mind and caused serious loss to its reputation.
Commenting on the stay, Amazon said: “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”.
Both Delhi Vyapar Mahasangh and Confederation of All India Traders (Cait), which had impleaded as a party to the case, have decided to file an appeal against the order of the High Court soon. Meanwhile, Cait said it will ask the Union government to speed up the ED investigation.
The court has asked the respondents in the matter, including CCI and Cait to file their responses within eight weeks.