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The Silicon Review Asia

CCI to Probe Amazon and Flipkart for Deep Discounting

CCI to Probe Amazon and Flipkart for Deep Discounting

The Competition Commission of India (CCI) has opened up an investigation on Monday looking into the alleged violations of competition laws by India’s largest online retailers, Amazon and Flipkart. The allegations include exclusive launch of mobile phones, preferred sellers on the marketplace, deep discounting and promotion of private labels. 

The order for the investigation comes against the scenario of trader communities across the country leveling several allegations of violations of FDI in e-commerce. The Confederation of All India Traders (CAIT) is spearheading a nationwide stir against the e-commerce giants.

“The Commission is of the opinion that there exists a prima facie case which requires an investigation,” said the order. The complaint was filed by Delhi Vyapar Mahasangh, a group representing small and medium sized businesses. The complaint alleged that several of the preferred sellers like Cloudtail and Appario Retail on amazon India and Omnitech on Flipkart were controlled by the companies themselves directly or indirectly. “We are currently reviewing the document. The Flipkart group is fully compliant with all applicable laws and FDI regulations” said Rajneesh Kumar SVP and chief corporate affairs officer at Flipkart Group said.

The CCI’s decision comes ahead of Jeff Bezos’ visit to India to meet senior government officials. We welcome the opportunity to address allegations made about Amazon; we are confident in our compliance and will cooperate fully with CCI,” an Amazon India spokesperson said. “The Commission perused the prices for different smartphone brands sols through Flipkart and amazon. It was observed that certain smartphone brands/models are available at a significantly discounted price on these platforms and are sold largely through the sellers identified as the platform’s ‘preferred sellers’. Whether funding of discounts in an element of the exclusive tie-ups is a matter that merits investigation,” said the order. 

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