CCI appeals in Supreme Court against stay on Amazon Flipkart probe

By: |
October 7, 2020 5:30 AM

Amazon had said the CCI order was passed without “prima facie application of mind”, and terming its findings “perverse, arbitrary, untenable in law”, had filed a writ petition in the Karnataka High Court seeking a stay on the investigation.

Anticipating such a move by the CCI, Amazon has filed a caveat in the SC, which means the Court has to give a hearing to the company before passing any order, the member said.Anticipating such a move by the CCI, Amazon has filed a caveat in the SC, which means the Court has to give a hearing to the company before passing any order, the member said.

The Competition Commission of India (CCI) has filed an appeal in the Supreme Court against an interim stay order issued by the Karnataka High Court in February against the fair trade regulator’s probe into the alleged discriminatory business practices by Amazon and Walmart-controlled Flipkart.

The plea was filed by the CCI on September 21. The matter may be listed for hearing this week, a member affiliated to the Delhi Vyapar Mahasangh (DVM) told FE. Anticipating such a move by the CCI, Amazon has filed a caveat in the SC, which means the Court has to give a hearing to the company before passing any order, the member said.

Following a plea by the DVM, the CCI in January had directed its director general to probe Amazon and Walmart-controlled Flipkart, stating that “…it needs to be investigated whether the alleged exclusive arrangements, deep-discounting and preferential listing by the Ops (opposite parties — Flipkart and Amazon) are being used as an exclusionary tactic to foreclose competition”.

Amazon had said the CCI order was passed without “prima facie application of mind”, and terming its findings “perverse, arbitrary, untenable in law”, had filed a writ petition in the Karnataka High Court seeking a stay on the investigation.

The High Court, while granting temporary relief to Amazon and Flipkart, had observed that the Enforcement Directorate has already initiated an investigation into the two firms’ operational activities alleged to be in contravention of the FDI (foreign direct investment) policy in e-commerce. The court also noted that while the CCI had asked for Amazon’s comments in an earlier case filed by the All India Online Vendors Association, it should have held consultations with the parties in the present matter before passing the impugned order.

Welcoming the appeal filed by the CCI, the Confederation of All India Traders said the association would urge the government to ban festival sales of these companies.

Amazon and Flipkart corner bulk of the domestic e-commerce market share, and have been investing heavily to grow their businesses. Flipkart received a fresh Walmart-led $1.2 billion capital infusion in July. Earlier this year, Amazon announced a fresh $1 billion investment in India, taking the Seattle-based firm’s total India investment commitment to $6 billion.

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