CCI investigation: Karnataka HC’s interim stay provides breather to Amazon, Flipkart

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Published: February 14, 2020 9:16:30 PM

The Confederation of All India Traders (CAIT) has said it would file an appeal against the High Court order. Delhi Vyapar Mahasangh is an affiliate of the CAIT.Both CAIT andDelhiVyaparMahasanghhave decided to file an appeal against the order of the High Court soon and both are consulting their respective lawyers.

Amazon on Monday had moved the high court seeking a stay on the investigation ordered by the CCI.

The Karnataka High Court on Friday granted an interim stay on the investigation ordered by the Competition Commission of India (CCI) against e-commerce giants Amazon and Flipkart for alleged violations of provisions of competition laws. “The commissions order directing investigation is stayed by the court. It has given eight weeks for the parties to respond,” an advocate connected with the case said.

Amazon on Monday had moved the high court seeking a stay on the investigation ordered by the CCI. In its plea, Amazon sought quashing and setting aside of the CCI’s January 13, 2020 probe order, and had also prayed the court to provide relief based on “facts and circumstances of the case in the interest of justice.” In January, fair trade regulator CCI had ordered the probe against Flipkart and Amazon for alleged malpractices, including deep discounting and tie-ups with preferred sellers on their platforms.

The order followed a complaint filed by Delhi Vyapar Mahasangh, whose members comprise many traders dealing in
smart phones and related accessories. In its petition, Amazon contended that the CCI order had been passed “without application of mind” and would cause irreparable loss/injury to the goodwill/reputation of the company if an investigation is allowed.

It also said the order would cause “serious prejudice” against Amazon and its findings are “perverse, arbitrary,
untenable” in law. Welcoming the stay, Amazon termed it as a step in the legal process. “While we welcome and respect the decision of the High Court of Karnataka, this is just a step in the legal process. We are confident about our compliance, Amazon spokesperson said in a statement.

The Confederation of All India Traders (CAIT) has said it would file an appeal against the High Court order. Delhi Vyapar Mahasangh is an affiliate of the CAIT.Both CAIT andDelhiVyaparMahasanghhave decided to file an appeal against the order of the High Court soon and both are consulting their respective lawyers.

Meanwhile, the CAIT would push with the Union government to speed up the ED investigation. In this context, a CAIT delegation would soon meet Commerce Minister Piyush Goyal and Finance Minister Nirmala Sitharaman, it said in a statement. CAIT said the high court has stayed the order for investigation passed by the CCI on the ground that the ED has already initiated investigation into Flipkart and Amazon’s activities that are alleged to be in contravention of the FDI policy.

The court was therefore of the opinion that FDI violations being in the realm of the ED and the Adjudicating Authority under the FEMA, the case of CCI vs Bharti Airtel would apply to the case and ED would have to give its report before the CCI could proceed with the matter. The court also noted that while the CCI had asked Amazon
for its comments in a previous case (filed by AIOVA), CCI should have also called the parties in the present matter when they were made respondents before passing the impugned order, it added.

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