Traders file plea against Flipkart-Walmart deal at CCI
The merger of Walmart and Flipkart will give rise to unfair practices like predatory pricing, deep discounts, and loss funding, said CAIT
Bengaluru: The Confederation of All India Traders (CAIT), one of the largest traders’ bodies in the country, filed a petition on Monday with anti-trust regulator Competition Commission of India (CCI), objecting to the Walmart-Flipkart deal on the ground that the buyout creates an uneven playing field for sellers.
The merger of Walmart and Flipkart will give rise to unfair practices like predatory pricing, deep discounts, and loss funding, said CAIT, which claims to represent around 70 million traders across the country.
Earlier this month, All India Online Vendors Association (AIOVA), which represents more than 3,000 online sellers, approached CCI with a similar objection alleging that Flipkart is using its dominant position to provide “preferential treatment” to a few sellers.
The complaints from CAIT and AIOVA come at a time when Walmart has applied for a CCI approval for its $16-billion acquisition of 77% stake in Flipkart.
Its proposed buyout of Flipkart did not create any competition concerns and the pecking order of the broader retail market in India remains unaffected by the deal, Walmart had said in May while seeking the approval.
The petition filed by CAIT advocate Abir Roy alleges that Flipkart is a “combination of predation, exclusive tie-ups and of preferential sellers where even online vendors face discriminatory conditions”.
Walmart being the largest shareholder of Flipkart with 77% stake is “bound to give preference to its inventory”, added the petition. It also said that the merger deal is bound to hurt small sellers as “there will be denial of market access to non-preferred sellers”.
Walmart, which is one of the world’s largest retailers, would prefer to sell its inventory on Flipkart either directly or through a network of associated sellers, resulting in higher market share for the “preferred” sellers, according to CAIT.
Pure offline retailers and wholesalers will be left with no option but to sell on Flipkart itself, the traders’ body said. Small sellers will then face discriminatory terms and conditions from Flipkart, in comparison to its preferred sellers, CAIT contended.
According to legal experts, Walmart’s proposed buyout of Flipkart should go through as it does not create an entity that has a monopoly-like position in either the offline or online retail business in India.