SC dismisses Amazon, Flipkart pleas against CCI probe

By: |
August 10, 2021 5:00 AM

Both the companies have been given four weeks' time to submit themselves to probe

It had subsequently filed a writ petition in the Karnataka High Court seeking a stay on the investigation.It had subsequently filed a writ petition in the Karnataka High Court seeking a stay on the investigation.

In a major setback for Amazon and Flipkart, the Supreme Court on Monday dismissed their individual appeals against a Karnataka High Court order allowing the Competition Commission of India’s (CCI’s) probe into their alleged anti-competitive business practices. Refusing to entertain the appeals filed by the two e-commerce firms, the apex court said that big companies like them should voluntarily come forward for such probes.

“There is a wrong understanding of the judgment here when notice is being sought… We expect big organisations like Amazon/Flipkart to voluntarily go for enquiry and you don’t want even that? You have to submit and inquiry has to be permitted…The inquiry must go on,” a bench led by Chief Justice NV Ramana said. The court gave four weeks’ time to both the firms to prepare their submissions before the CCI.

An Amazon spokesperson, in a statement later, said the company “has a high bar of compliance and we continue to comply with the Indian laws. We will fully cooperate with the CCI”.

On July 23, a division bench of the Karnataka HC had refused to interfere with the preliminary inquiry ordered by the CCI into the allegations of predatory pricing, deep discounting, preferential seller listing and exclusive partnerships against the two firms. The HC had observed that the inquiry initiated by the CCI cannot be crushed at the initial stage and had described the approach of both the firms as ‘an attempt to ensure that the inquiry does not attain finality’.

The case dates back to January 2020 and and has seen several hearings and submissions made by the parties concerned. Following a plea by the DVM (Delhi Vyapar Mahasangh), the CCI had in January 2020 directed its director general to probe Amazon and Walmart-controlled Flipkart, stating “…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 then said the CCI order was passed without “prima facie application of mind”, and termed its findings “perverse, arbitrary, untenable in law”. It had subsequently filed a writ petition in the Karnataka High Court seeking a stay on the investigation.

In February 2020, the court had stayed the CCI investigation on the ground that the Enforcement Directorate (ED) had already initiated investigation into the two firms’ operational activities alleged to be in contravention of the FDI (foreign direct investment) policy in e-commerce. In September 2020, the CCI filed an appeal in the Supreme Court against the interim stay order issued by the Karnataka High Court, following which fresh hearing in the case had started in the high court and the ruling went against the e-commerce firms.

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