CCI orders investigation against Amazon and Flipkart for unfair trade practices

Two days after warning dominant e-commerce platforms to exercise more transparency in their work, the Competition Commission of India (CCI) has on Monday issued an order to investigate the alleged competition law violations by e-commerce players- Amazon and Flipkart.

The competition watchdog has ordered a probe of Amazon and Flipkart over alleged malpractices of deep discounting, having preferred sellers on the marketplace, preferential listing and promotion of private labels, and exclusive launch deals of mobile phones.

As the e-commerce majors are continuously hitting business of other smaller sellers, the regulator has asked Director General Enforcement of CCI to carry out the investigation and submit the report within 60 days time span, said CCI  in an order.

Offline traders and mobile retailers have been protesting restlessly against exclusive sales tie-ups and availability of certain mobile phones online only for the past few months now.

Just a few days back,  a group representing small- and medium-sized businesses 'Delhi Vyapar Mahasangh' had approached the CCI alleging that Amazon and Flipkart are violating the Competition Act,2002.

Recently, CCI had announced its plans of investigating unfair deep discounts and contract terms between e-commerce marketplaces and sellers.

The commission had stated that it could intervene, on a case-by-case basis, in matters where unfair conditions or price is imposed through contractual provisions by an enterprise that is dominant in the relevant market.

Praveen Khandelwal, Secretary-General of the Confederation of All India Traders (CAIT), which is spearheading an aggressive nationwide movement against Amazon and Flipkart, welcome the antitrust body's order.

"Both Amazon & Flipkart have left no stone unturned in destroying and devastating the e-commerce and retail trade market by indulging into all kinds of malpractices including causing huge GST and Income Tax revenue loss to the Government. Their autocratic business module has resulted into closure of thousands of shops in the Country in last 3 months," said Khandelwal.

CAIT, which has also decided to protest against the forthcoming visit of Amazon CEO Jeff Bezos to India on January 15, has sought meeting with the FM and the PM to further urge them to institute an investigation into avoidance of GST and Income Tax liability on both e-comm giants.

Meanwhile, both the companies have deemed all these allegations baseless.