Competition Commission of India (“CCI”) has ordered an investigation into alleged violations under sections 3(1) and 3(4) of the Competition Act, 2002 (“Competition Act”) by Amazon and Flipkart in an order issued on 13 January 2020.

Allegations Made By Delhi Vyapar Mahasangh: It was alleged that Flipkart and Amazon were abusing their dominant position and entering into anti-competitive agreements with their preferred sellers on their platform.

Observations and Direction by CCI: CCI noted that it is a settled position that the Competition Act does not provide for inquiry into or investigation into the cases of joint/collective dominance as the same is not envisaged by the provisions of the Act. On the other hand, CCI noted that there are four alleged practices on the marketplaces, namely, exclusive launch of mobile phones, preferred sellers on the marketplaces, deep discounting and preferential listing/promotion of private labels.

CCI ruled that investigation was required to determine whether the alleged exclusive arrangements, deep-discounting and preferential listing by Amazon and Flipkart are being used as an exclusionary tactic to foreclose competition and are resulting in an appreciable adverse effect on competition contravening the provisions of Section 3 (1) read with Section 3(4) of the Competition Act. CCI has directed the DG to cause an investigation to be made into the matter under the provisions of Section 26(1) of the Act.

This post has been contributed by Ms. Vaneesa Agrawal and Ms. Vasuvita Singh.

[DISCLAIMER:  This article is for academic purpose and is solely to provide readers with general information regarding developments in Indian law. The information contained herein does not constitute legal or a professional advice.]