Competition Commission of India (CCI), which is India’s anti-trust body, has highlighted a wide range of issues on e-commerce platforms and has also ordered a large-scale investigation into two of the country’s largest online platforms — Amazon and Flipkart.
The issues highlighted by CCI includes the arrangements between smartphone vendors and e-commerce platforms to sell certain handsets exclusively online, and e-commerce firms apparently giving preferential treatment to certain sellers.
The CCI has also ordered the director general to investigate whether these two online retailers are offering deep discounts on their marketplaces and promoting their own private labels.
The development comes after a retail trade group alleged that the e-commerce giants were indulging in anti-competitive practices to gain a foothold in the country. The director general has been ordered to complete the investigation and submit the report within a period of 60 days.
Commenting on the order, an Amazon India spokesperson said: “We welcome the opportunity to address allegations made about Amazon. We are confident in our compliance, and will cooperate fully with CCI.”
On the other hand, a Flipkart spokesperson said: “The Flipkart group is fully compliant with all applicable laws and FDI regulations. We take pride in democratising e-commerce in India and giving market access to lakhs of MSMEs, sellers, artisans and small businesses, making quality and affordable goods available to consumers through our transparent and efficient marketplace while creating lakhs of jobs.”
This will be yet another major issue for both the companies after they faced a major regulatory hurdle in the country last year which imposed ban on exclusive sales, restrictions on discounts and cashback promotions.
Both these retailers have invested heavily in the Indian market given that it is one their largest markets. While Amazon has invested more than $5 billion in its India business, Walmart acquired majority stake in Flipkart for about $16 billion in 2018.