India ordered a large-scale investigation of Flipkart and Amazon India on Monday after a retail group claimed that the e-commerce giants were engaging in anti-competitive practices to gain a foothold in the country.
Competition Commission of India (CCI), the local antitrust authority, highlighted a wide range of issues, including agreements between smartphone vendors and e-commerce platforms to sell certain cell phones only online, and e-commerce companies that appear to be giving preferential treatment to certain sellers deserve an investigation.
The IHK also ordered the director general to investigate whether Amazon India and Walmart offer deep discounts on their marketplaces and promote their own brands.
"The informant claimed that Flipkart and Amazon had an inherently anti-competitive model for electronic commerce," said the Chamber of Commerce.
A Flipkart spokesman told TechCrunch that the company was reviewing the document.
“The Flipkart Group complies with all applicable laws and FDI regulations. We are proud of the democratization of e-commerce in India and of enabling market access for many MSMEs, sellers, artisans and small businesses, to provide consumers with high quality and affordable goods through our transparent and efficient market, while providing plenty of jobs to create, ”added the spokesman.
"We welcome the opportunity to raise allegations against Amazon. We are confident that our guidelines will be followed and will fully work with CCI, ”an Amazon spokesman told TechCrunch.
Delhi Vyapar Mahasangh, a group representing micro and small businesses, brought the matter to the IHK.
The decision to investigate Amazon India and Flipkart would increase the headache of the two e-commerce companies that faced a major regulatory hurdle in the country last year. Amazon has invested more than $ 5 billion in its India business, while Walmart acquired a majority stake in Flipkart in 2018 for $ 16 billion. Both companies rank India among the most important overseas markets.
The direction also comes days before Amazon boss Jeff Bezos is expected to launch an event in New Delhi on Wednesday that focuses on small businesses.
An investigation into the alleged anti-competitive practices of Amazon and Flipkart is "the first concrete step that has been waiting for a long time" to identify the disadvantages that small retailers are facing today, said Praveen Khandelwal, general secretary of the Confederation of all Indian retailers – an organization that represents 70 million traders and 40,000 trade associations in India.
The Director General was instructed to complete the investigation and submit the report within 60 days.