US tech giants have seen better days, with Google being the latest name – it was fined $123 million by Italy’s antitrust authority last month. Amazon and Flipkart, both leaders in their sector, have now added their names to the list as their businesses in the world’s second-largest internet market ran into a major setback after the Karnataka High Court dismissed writ petitions by both e-commerce giants and upheld the Competition Commission of India’s (CCI’s, the antitrust agency of India) decision to conduct an investigation through its Director-General into whether the US giants had entered into anti-competitive agreements, which violated the provisions of the Competition Act 2002.
The probe had been put on hold after both companies had challenged it, but now that Justice PS Dinesh Kumar dismissed the petition on Friday, the CCI is now free to restart its investigation. It is expected that both Amazon India and Flipkart would challenge this order, especially after it came to light that Flipkart had sought an extension of the interim hold on the probe for another two weeks, which was rejected by the court.
Abir Roy, a lawyer for the trader group, said that the decision of the court effectively paved the way to restart the investigation, which had been on hold.
“We will review the judgment carefully and decide on the next steps,” a spokesperson for Amazon India said in an emailed statement.
Following allegations from trade bodies such as Confederation of All India Traders (CAIT) and Delhi Vyapar Mahasangh (DVM) which included deep discounting practices and prioritizing select sellers, predatory pricing, and exclusive partnerships, the CCI launched its probe in January 2020, saying it had ‘prima facie’ evidence to begin an investigation, and that “there appears to be exclusive partnerships between smartphone manufacturers and e-commerce platforms.”. Both Amazon and Flipkart had vehemently denied the allegations, moving to the Karnataka High Court and getting a hold on the probe. The Supreme Court referred back to the Supreme Court, which passed the order on Friday.
According to CAIT, the court order fully vindicated its stance that both American e-commerce giants violated the FDI policy, rules, and other laws. “CCI should begin its probe immediately,” said Praveen Khandelwal, secretary-general of CAIT.