E-commerce major Amazon has filed a petition in the Karnataka High Court to quash an investigation ordered by India’s competition watchdog into the alleged malpractices of the American etailer and its chief rival Flipkart. Amazon also sought an interim stay on the investigation, as per the petition filed, Monday.
Amazon said the investigation would cause irreparable damage and loss to its goodwill and asked the court to issue a writ directing the “quashing and setting aside the Impugned Order dated January 13, 2020… passed by the Competition Commission of India.”
Responding to ET’s email an Amazon spokesperson declined to comment saying the matter was sub judice. Flipkart declined to comment.
Last month, the Competition Commission of India or CCI said it would investigate Amazon Seller Services along with Flipkart Internet, two units of the country’s largest e-commerce marketplaces, over their discounting practices, exclusive brand launches and preferential treatment of a few sellers.
The investigation was launched after an exhaustive market study conducted by CCI in which it found opacity in the functioning of online marketplaces that was creating a rift between them and sellers on their platforms.
An Amazon spokesperson at the time had said the company was confident in its compliance and would cooperate fully with the CCI.
“It’s an aggressive defence from Amazon – challenging the premise of the CCI order. However given recent trends by the government and the CCI, questions practices of online platforms are only going to increase in the coming days,” said Arjun Sinha, AP & Partners.
The CCI’s order followed an exhaustive market study conducted by the competition authority in which it found opacity in the functioning of online marketplaces that was creating a rift between them and sellers on their platforms. The CCI in its market study had suggested self-regulation by e-commerce marketplaces.
The probe against Flipkart and Amazon comes at a time when there’s increased scrutiny by the government on e-commerce marketplaces, over alleged malpractices. Commerce and industries Minister Piyush Goyal has on several occasions asked e-commerce players to abide by the rules of the land and not violate FDI norms which disallow multi-brand retail.
In December 2018, the government had issued a clarification to FDI laws for e-commerce, disallowing marketplaces from listing group companies as sellers. The move had led to Amazon divesting its stake in Cloudtail and Appario, two of the largest sellers on its platform, from 49% to 24% in order to remain compliant, when the rules came into effect on February 1, 2019.
At the time, Amazon had told investors in one of its quarterly results briefings that disruptions in supply caused by change in regulations in India had not affected its sales.
Leave a Reply