Karnataka High Court to decide on Amazon seeking stay of business practice probe by CCI on Friday

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Published: February 14, 2020 2:15:14 AM

Amazon’s counsel had on Wednesday told HC that there should be prima facie finding with adverse effects on competition before CCI could order such an investigation, according to media reports. Amazon refused to comment as the matter is subjudice.

Amazon’s counsel had on Wednesday told HC that there should be prima facie finding with adverse effects on competition before CCI could order such an investigation

The Competition Commission of India (CCI) on Thursday told the Karnataka High Court that the writ petition filed by Amazon under article 226 of the Indian Constitution seeking a stay on its order last month asking its director-general (DG) to investigate the firm’s business practice cannot influence the order passed under section 26 (1) of the Competition Act and further 26 (1) does not create any civil consequences.

Senior counsel Harish Narasappa, appearing for CCI, said the order under section 26 (1) does not affect the rights of others. It is only a departmental order and not quasi-judicial order, the counsel said. “Section 26 (1) of the Competition Act states that investigation can be ordered if prima facie case exists,” he said. He further stated that although the petitioner (Amazon) referred to the market report on e-commerce during presentation of its argument before the court, it cannot be applied to the facts of this case.

Lawyers appearing for Delhi Vyapar Mahasangh (DVM) said the CCI has ordered the investigation under the powers vested on it by virtue of competition law. Amazon’s petition has no merit and needs to be rejected. The HC is expected to pass its order on the interim stay on the probe on Friday.

Amazon’s counsel had on Wednesday told HC that there should be prima facie finding with adverse effects on competition before CCI could order such an investigation, according to media reports. Amazon refused to comment as the matter is subjudice.

On Monday, Amazon had filed the writ petition in the HC. It said that an interim stay on the proceedings directed by CCI should be granted as “the balance of convenience for the stay lies in favour of the petitioner as a bona fide company”. The CCI investigation would also cause “irreparable loss and injury to the company and its reputation”. Further, “no harm or injury would be caused to the Respondent no. 1 (CCI) if a stay is granted”, Amazon said.

Following a plea by DVM, the CCI in January had directed its director-general to investigate Amazon and Flipkart on alleged charges of deep discounting, exclusive arrangements and preferential listing of sellers. In its order the CCI had stated 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”.

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