Competition Commission of India (CCI) has rejected allegations against five e-commerce majors accused of controlling product pricing and unfair business practices. CCI said it has not found any evidence of such violations against any of the firms. The complaint was filed by Mohit Manglani from Mumbai and All Delhi Computer Traders’ Association (ADCTA) against Amazon, Flipkart, Snapdeal, Jabong and Myntra.
“The CCI ruling comes as a welcome news. E-commerce in India is not just meeting the aspirations of millions of consumers but also providing a nationwide market to small- and medium-sized enterprises, thereby, helping them grow and expand businesses. This move by CCI is encouraging for the growth of the sector,” said a Snapdeal spokesperson.
It was alleged that online portals get into agreement with manufacturers to sell products on their website exclusively. “Further, to create a hype for the product, the supply is controlled by the e-portal with whom the exclusive arrangement has been made, creating an impression of scarcity,” the complaint had said.
After looking into the matter for over a month, CCI ruled that online portals are not violating the competitive pricing norms. “It seems unlikely that an exclusive arrangement between a manufacturer and an e-portal will create any entry barrier as most of the products which are illustrated in the information to be sold through exclusive e-partners face competitive constraints. For example, mobile phones, tablets, books and cameras are neither alleged nor seem to be trodden by monopoly or dominance. Further, it does not appear that because of these exclusive agreements any of the existing players in the retail market are adversely affected, rather with new e-portals entering into the market, competition seems to be growing,” said the 10-page CCI order.
The CCI judgment added, “The commission is convinced that on the online portals, every product cannot be taken as a relevant market in itself. Irrespective of whether we consider e-portal market as a separate relevant product market or as a sub-segment of the market for distribution, none of them seems to be individually dominant.
There are several players in the online retail market which have been arrayed as OPs in the present case, offering similar facilities to their customers. In view of the above, the Commission does not consider it necessary to go into the question of abuse of dominance by the OPs as raised by the Informant and ADCTA.”
“We are totally committed to fair play and this decision further stregthens our belief,” said a Flipkart spokesperson while responding to FE’s questions on the same.
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