As Amazon CEO Jeff Bezos’ Indian visit is just around the corner, the eCommerce giant will have to face an antitrust probe from the Competition Commission of India (CCI). Along with Walmart-owned Flipkart, Amazon has been alleged violations of competition law in the latest setback.
CCI said, it was ordering a wider investigation persuading a report of allegations that Amazon and Flipkart were promoting some “preferred sellers” and, as a result, bringing difficulty for smaller sellers. The investigation is expected to close in 60 days. However, similar cases in the past took more than 60 days.
Facing the probe, Flipkart Senior Vice President Rajneesh Kumar said that the company is always following the law and presently reviewing the CCI order. “We welcome the opportunity to address allegations made about Amazon; we are confident in our compliance, and will cooperate fully with the CCI,” representative of Amazon said.
Delhi Vyapar Mahasangh, a group representing small and medium-sized businesses, filed a complaint against the two eCommerce platforms. According to the filing, through known and unknown ways, many of Amazon and Flipkart exclusive sellers were affiliated with the companies themselves.
The CCI found four anti-competitive practices done by the two companies. The e-commerce firms have exclusively launched mobile phones, giving promotions to exclusive merchants, top discounting practices, and preferring some seller listings over others are the major allegations.
It is not an isolated complaint against the giants. Similarly, Indian brick-and-mortar traders also have come up with an allegation that two foreign companies have been spending billions of dollars to bring deep discounts, and it ends up with a major loss for small businesses.
A recent study by CCI claims that India’s eCommerce business is skyrocketing and is expected to touch $120 billion by the end of 2020. It is far more than the valuation in 2019. Along with the development, several challenges are out there to be solved. CCI will seriously consider the probe to tackle the issues.
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