Amazon contests anti-trust regulator’s charges in Karnataka high court

American e-commerce leader Amazon.com Inc. on Wednesday told the Karnataka high court that evidence submitted by India’s antitrust regulator could not justify its decision to initiate a probe against the platform.

Amazon and Walmart-owned Flipkart are facing a Competition Commission of India (CCI) probe over allegations of offering deep discounts, preferred listings, promotion of private labels and exclusive partnerships with phone brands.

The scrutiny of Amazon, which has committed to invest over $5 billion in India, comes amid rising opposition by small traders against their online counterparts offering deep discounts to capture bigger market share.

Amazon.com’s India unit filed the writ petition on Monday seeking a stay on the probe ordered by the CCI on 14 January against it for alleged violations of competition law.

The CCI initiated a probe based on a complaint from an informant who cited text messages on sales of mobile phones on Amazon and Flipkart to allege a partnership between the phone makers and the online platforms. The informant also alleged the existence of ‘vertical arrangements between Flipkart and its preferred sellers as well as Amazon and its preferred sellers “which leads to a foreclosure of other non-preferred sellers from the online marketplace.” The informant adds that these preferred sellers also “alleged to be affiliated with or controlled by Flipkart/Amazon either directly or indirectly.”

Countering this, Gopal Subramaniam, counsel for Amazon, said the platform could not be held for messages sent by the seller. He said it was the seller who sent text messages to customers on products exclusively available on the platform.

In order to initiate a probe, CCI cited the allegations that include that “offline retailers are forced to purchase smartphones either from manufacturers’ e-stores or from the platforms e-portals”.

The Confederation of All India Traders (CAIT), that has moved an application for impleadment in the case, said Amazon was trying to mislead the court and alleged that the platform had violated FDI (foreign direct investment) norms, and was involved in predatory pricing and deep discounting.

“The very effort to stop the investigation is a testimony to their unethical practices,” Praveen Khandelwal, secretary general, CAIT, said in a statement.

The counsel appearing for the Delhi Vyapar Mahasangh or the informant, said it was not claiming there was a violation, but only asking for an investigation to be conducted.