Supreme Court put a stay on NCLAT order to investigate against Flipkart

The apex court of the country on Wednesday has put a stay order on National Company Law Appellate Tribunal (NCLAT) order that asked Competition Commission of India (CCI) to start investigation against Walmart-controlled Flipkart over the use of its dominant position.

A bench of Chief Justice S A Bobde and Justices A S Bopanna and V Ramasubramanian were initially of view to send back the matter to NCLAT. However, they later agreed to put a stay on the tribunal’s order.

During the hearing, senior counsel Harish Salve, who was representing Flipkart, argued that CCI had misread the findings of tax departments. Salve emphasised that Amazon is against Flipkart and if the US-headquartered company isn’t a dominant player then the allegation of predatory pricing can’t be applied to Flipkart, said an economic times report via PTI.

Salve further argued that Flipkart isn’t a dominant player hence allegations made by All India Vendor Association (AIOVA) don’t apply to the Bengaluru-based company. AIOVA had alleged abuse of market dominance and appealed to CCI against Flipkart’s WS Retail in November 2018.

The association of over 2,000 sellers alleged that Flipkart and Amazon have been supporting a limited set of companies such as WS Retail and Cloudtail. It also alleged Flipkart has indulged in predatory pricing and favouring its own brands such as  Billion, Marq and Smartbuy, which is destroying the business of smaller rivals and online sellers.

The seller body has similar complaints against Amazon’s Cloudtail and Appario Retail, which is also involved in predatory pricing and selling its own private labels.

Hearing the matter in November 2018, CCI rejected AIOVA’s claims and said that Flipkart and Amazon were not using market dominance. On contrary to CCI’s order, NCLAT had directed its Director General (DG) to investigate the allegations.