Supreme Court transfers CCI’s Amazon-Flipkart antitrust probe case to Karnataka High Court

The Supreme Court has transferred to the Karnataka High Court several petitions challenging the Competition Commission of India’s (CCI’s) probe into alleged anti-competitive practices by e-commerce giants Amazon and Flipkart. On Monday a bench comprising Justice Abhay S. Oka and Justice Ujjal Bhuyan directed the Karnataka High Court to hear the case expeditiously.

The order came after both the CCI and e-commerce sellers on the two platforms agreed to transfer the cases as the Karnataka High Court had already been hearing the matter. The CCI had filed a plea seeking the consolidation of all petitions challenging its investigation into Amazon and Flipkart, and the transfer of these cases to a single high court. 

The petitions were filed against Amazon-owned Cloudtail India Pvt Ltd and other entities. These companies had filed writ petitions in various high courts, challenging the CCI’s antitrust probe into the two e-commerce giants, which later expanded to include the sellers.

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During a Supreme Court hearing in December, the court orally observed that the Karnataka High Court should be the sole venue for hearing the case. However, it did not pass a final order and stayed the proceedings in the Karnataka High Court until it issued a final direction. On Monday it passed its final order transferring the pleas to the Karnataka High Court. A single-judge bench of the Karnataka High Court will now hear the case on 15 January.

CCI accused of ‘forum shopping’

During the course of the hearings, disagreements arose between the CCI and e-commerce sellers regarding which high court should handle the matter. Attorney general R Venkataramani, representing CII, argued that the Delhi High Court should hear all the petitions, while the sellers, represented by senior counsels Abhishek Manu Singhvi and Mukul Rohatgi, suggested the Karnataka High Court continue hearing the case. 

Venkataramani proposed that once the Karnataka High Court wrapped up the pending case, the remaining petitions from other high courts could be transferred to the Delhi High Court. However, the Supreme Court rejected this suggestion, saying it could set a dangerous precedent. It instructed the attorney general to seek clear instructions on whether the CCI would agree to transfer the cases to the Karnataka High Court, which the CCI subsequently accepted.

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The CCI accused Amazon and Flipkart of using the sellers to challenge the investigation by filing petitions across the country. The e-commerce sellers, in turn, accused the CCI of “forum shopping”. Forum shopping is when a party chooses a court or jurisdiction to hear their case based on which one will give them the most favourable outcome. It's also known as "bench hunting". In its plea, the CCI sought to transfer 27 writ petitions filed by Amazon, Flipkart, and their vendors from various high courts to the Delhi High Court to avoid multiple proceedings.

Case history

The case against Amazon and Flipkart originated from a 2019 complaint filed by the Delhi Vyapar Mahasangh, linked to the Confederation of All India Traders, which accused the online marketplaces of favoring certain sellers. On 13 January 2020 the CCI initiated a formal probe, focusing on issues such as exclusive arrangements, deep discounting, and preferential listings. The investigation aimed to determine whether these actions amounted to exclusionary tactics that distorted competition.

Several online sellers on Amazon and Flipkart filed writ petitions in various high courts, challenging the CCI’s probe. The high courts of Karnataka, Punjab and Haryana, and Madras subsequently stayed the CCI’s investigation.

In February 2020 the Karnataka High Court temporarily paused the investigation after Amazon and Flipkart challenged the CCI’s authority. However, in June 2021, the court allowed the investigation to resume. The companies’ pleas to the Supreme Court were dismissed in August 2021, allowing the investigation to proceed.

The CCI believes the sellers’ writ petitions are an attempt to limit its investigative powers. However, the sellers argue that their status as “third parties” in the investigation was changed to “opposite parties” in July 2024 without prior notice or a hearing.

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In August 2024, the CCI’s director general submitted a report revealing that major smartphone brands such as Xiaomi, Samsung, OnePlus, Realme, and Motorola were launching products exclusively on Amazon and Flipkart. The investigation found these platforms prioritised certain sellers, creating an imbalanced marketplace. The report also raised concerns about compliance with foreign direct investment (FDI) rules, highlighting the use of foreign investments to provide discounted services exclusively to select sellers.

In response, Amazon and its sellers filed writ petitions in various high courts to halt the probe. One such petition was filed before the Karnataka High Court, where Appario Retail, formerly the largest seller on Amazon India, sought to quash the investigation. 

On 27 September 2024 the Karnataka High Court temporarily stayed the proceedings, citing procedural lapses in the CCI’s investigation, including the unauthorised reclassification of entities from “third parties” to “opposite parties”. This prompted the CCI to approach the Supreme Court.