Amazon, Flipkart Will Not Be Investigated, High Court Finds No Evidence; CCI On Backfoot?
In a big relief to ecommerce portals Amazon and Flipkart, Karnataka High Court has not found any evidence which suggests that these two ecommerce majors are breaking any rules.
Is CCI on backfoot now?
Karnataka High Court: No Evidence Against Amazon, Flipkart
During the hearing of a plea by Amazon and Flipkart in Karnataka High Court, to stop CCI or Competition Commission of India from investigating them, the Bench observed that there are evidence found.
In fact, CCI has informed that they planned to start the investigation solely on the basis of a complaint filed by brick and mortar shops.
The High Court said, “The contention urged on behalf of the petitioner (Amazon) that CCI has imagined (the) existence of ‘some agreement’ merits consideration,”
This way, the High Court has granted interim relief to both Amazon and Flipkart, and have stopped CCI from investigating them.
This is big boost to the entire ecommerce industry, because if the investigation had started, then every ecommerce company in India could have been under the radar.
What Is The Case All About?
Delhi Vyapar Mahasangh, a trade union of traders and retailers having brick and mortar shops/showrooms had complained to CCI that Amazon and Flipkart are breaking anti-competition rules.
They had claimed that Amazon and Flipkart forge partnerships with smartphone makers, and then sell new smartphones at huge discounts, thereby killing the business of offline retailers.
CCI was about to start an investigation against Amazon and Flipkart, based on the complaint.
But then, both Amazon and Flipkart joined forces, and appealed in Karnataka High Court against this investigation by CCI.
They argued that there is no proof or evidence with CCI which proves that they have underhand deals with smartphone makers.
Quashing the claims made by CCI, the High Court has clearly stated: …it is recorded in paragraphs No. 22 and 23 (of the CCI order) that there ‘appears’ to be exclusive partnership between smart phone manufacturers and ecommerce platforms. This finding is based on allegations made in the complaint,”
Now, the next move of CCI is awaited
We will keep you updated, as more details come in.