CCI dismisses unfair business practices complaint against Amazon Seller Services, others

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September 14, 2020 11:01 PM

CCI observed that online sale of counterfeit goods is a matter of concern for brands and consumers alike.

They also alleged abuse of dominance, especially by Amazon Seller Services, which operates the amazon.in website in the country, leading to foreclosure of competition by hindering entry into the market.

Fair trade regulator CCI has dismissed a complaint of alleged unfair business practices against Amazon Seller Services Pvt Ltd, Amazon Export Sales LLC and Cloudtail India Pvt Ltd.
The ruling came on a complaint filed by Lifestyle Equities C V and Lifestyle Licensing B V.

Lifestyle Licensing B V is the proprietor of the brand Beverly Hills Polo Club (BHPC), while Lifestyle Equities C V is its licensee, which in turn has appointed an exclusive licensee, Major Brands India Pvt Ltd for the Indian region.

The informants alleged unfair and anti-competitive practices by Amazon Seller Services Pvt Ltd, Amazon Export Sales LLC and Cloudtail India and their affiliate entities.

These caused an exclusionary effect on the informants’ business operations and impacted visibility of their fashion products, they claimed.

They also alleged abuse of dominance, especially by Amazon Seller Services, which operates the amazon.in website in the country, leading to foreclosure of competition by hindering entry into the market.

The complainants said they do not sell any of their fashion products under the BHPC brand on Amazon’s e-commerce platform. Their products were earlier available only on the website of Lifestyle’s licensee and now only on its own website and in brick-and-mortar stores.

However, Amazon allegedly offered counterfeit/unlicensed/unauthorised products of the informants at ‘unfair, discriminatory and/or predatory prices’.

The Competition Commission of India (CCI), in an order dated September 11, noted that there are multiple players operating in the relevant market for services provided by online platforms for selling fashion merchandise in India.

“Thus, looking at the present market construct, it does not appear that any one platform is occupying a dominant position in the relevant market,” it added.

With respect to allegation of exclusive arrangements, deep discounting and preferential listing by Amazon, CCI said that exclusive tie-ups between platforms and fashion brands do not seem to exist and there are plenty of channels of intermediation available for fashion brands, sellers/retailers and consumers to access or reach each other.

CCI noted that the primary allegation pertains to counterfeiting / unlicensed/ unauthorised selling of products on the Amazon’s platform at a price which allegedly is significantly lower than the price of the original product, but given that Amazon is not dominant in the relevant market, the issue does not lend itself to anti-trust scrutiny.

CCI observed that online sale of counterfeit goods is a matter of concern for brands and consumers alike.

“The Commission observes that besides antitrust law, the issue of alleged sale of counterfeits on online platforms is amenable to be addressed through other legal/regulatory instrumentalities as well.

“Thus, though the Commission is statutorily constrained from looking into this issue because of the absence of OP-1’s dominance, the issue of counterfeit may be addressed through other regulatory instruments in view of the adverse implications it has on sellers and buyers in general,” it said.

OP-1 refers to Amazon Seller Services.

The Commission concluded that no case is made out in the given facts and circumstances of the present case.

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