Supreme Court rejects Amazon, Flipkart pleas against CCI antitrust probe

In a big setback for e-commerce majors Amazon and Flipkart, the Supreme Court on Monday rejected the companies’ pleas to halt an antitrust investigation by the country’s competition watchdog. 

In fact, a bench of Chief Justice of India NV Ramana and Justice Surya Kant held that the companies should voluntarily participate in the antitrust investigation. 

"We expect big organizations like Amazon and Flipkart to voluntarily go for enquiry and you don't want even that? You have to submit and enquiry has to be permitted,” the Supreme Court held. 

The apex court’s judgement came in response to petitions filed by Amazon and Flipkart which sought to set aside a July judgement by the Karnataka High Court which allowed the antitrust investigation into the two companies by the Competition Commission of India or CCI. 

In fact, the CCI, represented by Solicitor General Tushar Mehta wanted the two companies to respond to questions sent to them as part of the investigation within a week. 

However, upon request from Flipkart’s counsel senior advocate Abhishek Manu Singhvi, the apex court allowed the companies four weeks to respond.

"We see no ground to interfere. However we grant four weeks for the expiry to submit to enquiry", the Supreme Court said. 

The CCI’s probe into the two companies dates back to 2019 following a complaint filed by the Delhi Vyapar Mahasangh, a group of MSME (Micro, Small and Medium Enterprises) smartphone traders.

DVM had accused that Amazon and Flipkart had certain agreements with a group of select preferred sellers and that it gives these sellers unfair preferential treatment over others. 

However, both Amazon and Flipkart have gone to lengths to get the investigation quashed.

The two companies had approached the Karnataka High Court challenging the probe, but a single-judge bench of the court had allowed the investigation to go on. That was soon followed by the two e-commerce giants filing an appeal against that order. 

However, a division bench of the Karnataka High Court on July 23 upheld the previous order of the smaller bench and said that the investigation should go on.

Welcoming the Supreme Court’s order, the traders’ body Confederation of All India Traders called the verdict a “milestone”. 

“We demand Piyush Goyal to direct CCI to vegan aggressive probe and FM Nirmala Sitharaman to direct ED to send notice to Amazon as well,” CAIT said.