The petition filed by Flipkart and Amazon against the Competition Commission of India (CCI) to stop it from investigating their business practices was declined by the Karnataka High Court. The judgment was given by Justice PS Dinesh Kumar, allowing the antitrust agency to resume its inquiry against e-commerce business.
Flipkart and Amazon are expected to fight the ruling. Flipkart’s request for a two-week extension of the temporary stay on the investigation was denied by the court.
They have been given 30 days to appeal the decision.
Last January, the Competition Commission of India (CCI) initiated an inquiry against the two corporations, citing “prima facie” evidence to launch an inquiry under Section 26(1) of the Competition Act, 2002. Before that, claims were made by trade groups including the Confederation of All India Traders (CAIT) and the Delhi Vyapar Mahasangh (DVM) that Amazon India and Flipkart were providing predatory discounts to customers.
A spokesperson from Amazon said it will “review the judgment carefully and decide on the next steps”. No comments by Flipkart yet.
“It fully vindicates the stand of CAIT — that Amazon’s and Flipkart’s business model is entirely based on violating the FDI policy, rules, and other laws,” said CAIT secretary general Praveen Khandelwal. “CCI should begin its probe immediately.”
The investigation was launched just days before Amazon CEO Jeff Bezos landed in India on a business trip in 2020.
In February 2020, the two corporations filed a petition with the Karnataka High Court, which granted a temporary stay on the investigation. In October, CCI filed a petition with the Supreme Court, but the matter was remanded to the high court.
Last year, CCI informed the court that Amazon’s claims were “mischievous.”
Amazon called CCI’s action “perverse, capricious, and unconstitutional in law,” and said allowing the regulator to undertake the investigation would be an abuse of authority. Moreover, small online retailers and offline merchants have also complained about e-tailers favoring particular suppliers.