CCI reveals Antitrust laws breach of U.S e-commerce giants Amazon and Flipkart

The Competition Commission of India (CCI) in 2020 ordered an investigation into Amazon and Flipkart for allegedly promoting certain sellers, which is a move that is capable of hurting small retailers.

The Indian Antitrust investigation found that U.S e-commerce giant Amazon and Walmarts Flipkart violated local competition laws by giving preference to some sellers, prioritizing certain listings, and steeply discounting products on their shopping website.

The investigation was triggered by a complaint from the Delhi Vyapar Mahasangh, which is an affiliate of the country's biggest trade body, Confederation of All Indian Traders (CAIT), which represents 80 million retailers.

India's main Antitrust law is the Competition Act of 2002, which prohibits anti-competitive practices and promotes fair competition among players of the market.

According to the CCI, a 1027 page report on Amazon and a separate, 1696 page report on Flipkart by the CCI investigators revealed about the ecosystem by two companies where preferred sellers appeared higher in search results, than other sellers.

The key findings of the CCI report are not public but have been reviewed by Reuters. Certain key findings are:

Existence of Preferred Sellers is an unfair treatment in these platforms which is against the local competition laws of India. According to the reports, Amazon has 6 preferred sellers and Flipkarrt has 33, who get the preferential treatment on the platforms. These sellers receive marketing,warehousing and other services at a ‘miniscule cost’.

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Preferential Listing, majority products appearing at top of Amazon and Flipkart listings were from alleged preferred sellers. This acts as a barrier for other sellers.

Deep Discounting, both Amazon and Flipkart has enabled their affiliated and preferred sellers to provide deep discounts in case of products. This involves selling these products much below cost for the purpose of driving out competition, suggested the CCI report.

Also providing, Exclusive Product Launches in partnership with smartphone and technology companies are also done in it. This helps in exclusively launching the products of the preferred sellers, also creating a hype and driving out competition.

Amazon and Flipkart, as well as the CCI, did not respond to Reuters queries regarding the Preferred sellers. They have previously denied wrongdoing accused against them.

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