CCI finds alleged collusion between Samsung, Xiaomi and other smartphone makers and Amazon, Flipkart: Report

Samsung, Xiaomi, and other smartphone makers allegedly colluded with Amazon and Flipkart, breaching Indian antitrust laws by favouring select sellers and launching products exclusively online, as per CCI investigations, Reuters reported. 

Aditya Kalra, Reuters
Updated15 Sep 2024, 09:52 AM IST
File image of a customer browsing smartphones at an electronics store in Mumbai.
File image of a customer browsing smartphones at an electronics store in Mumbai. (Photographer: Vivek Prakash / Bloomberg)

Samsung, Xiaomi and other smartphone companies colluded with Amazon and Walmart's Flipkart to exclusively launch products on the e-commerce firms' Indian websites in breach of antitrust laws, according to regulatory reports seen by Reuters.

Antitrust investigations conducted by the Competition Commission of India (CCI) have found that Amazon and Flipkart violated local competition laws by giving preference to select sellers, prioritising certain listings, and steeply discounting products, hurting other companies, Reuters reported this week.

The CCI's 1,027-page report on Amazon also said the Indian units of five companies — Samsung, Xiaomi, Motorola, Realme and OnePlus — were "involved in the practice of exclusive" phone launches in "collusion" with Amazon and its affiliates, breaking competition law.

Also Read | Are banks closed for Eid-e-Milad, Ganesh Visarjan next week? Check details here

In Flipkart's case, a 1,696-page CCI report said the Indian units of Samsung, Xiaomi, Motorola, Vivo, Lenovo and Realme conducted similar practices.

The inclusion of smartphone makers like Samsung and Xiaomi in the case could increase their legal and compliance headaches.

"Exclusivity in business is anathema. Not only is it against free and fair competition but also against the interest of consumers," CCI's additional director general G.V. Siva Prasad wrote in the Amazon and Flipkart reports, in identical findings.

Reuters is first to report the smartphone companies have been accused of anticompetitive behavior in the CCI's reports which are dated Aug. 9 and are not public.

Also Read | Oil India aims to operate Numaligarh refinery at 180,000 bpd capacity by 2027

Xiaomi declined to comment, while the other smartphone makers did not respond to requests for comment.

Amazon, Flipkart and the CCI did not respond, and have not so far commented on the reports' findings.

Both the CCI reports said that during investigations Amazon and Flipkart "deliberately downplayed" allegations of exclusive launches, but officials found the practice was "rampant".

Counterpoint Research data shows that South Korea's Samsung and China's Xiaomi are two of India's biggest smartphone players, together holding an almost 36% market share, with China's Vivo on 19%.

India's e-retail market is set to exceed $160 billion by 2028, up from $57-60 billion in 2023, consultancy firm Bain estimates.

Also Read | Starbucks’ new CEO wants to recapture the coffeehouse vibe

The investigation findings are a major setback for Amazon and Flipkart in a key growth market where they have faced the ire of small retailers for years for hurting their offline businesses.

The CCI has also said both companies used their foreign investments to provide subsidised rates for services like warehousing and marketing to a select number of sellers.

Online Sales Boom

Some of the smartphone companies - Xiaomi, Samsung, OnePlus, Realme and Motorola - have been ordered to submit their financial statements for three fiscal years to 2024, certified by their auditor, to the CCI, according to an internal CCI document dated Aug. 28, also seen by Reuters.

The investigation into Amazon, Flipkart and their sellers was triggered in 2020 by a complaint from an affiliate of the country's biggest retailer association, the Confederation of All India Traders, which has 80 million members.

Also Read | GOAT box office Day 10: Thalapathy Vijay’s movie earns ₹13 crore on Saturday

The CCI will in coming weeks review any objections to its findings from Amazon, Flipkart, the retailer association, and the smartphone companies, and could potentially impose fines along with mandating companies to change their business practices, people familiar with the matter said.

Indian retailers have repeatedly accused Amazon and Flipkart, and smartphone companies, of exclusive phone launches online, saying shopkeepers suffered as they didn't get the latest models and customers looked for them on the shopping websites.

"Exclusive launches had not only severely affected the ordinary sellers on the platform but also the brick-and-mortar retailers who were provided mobile phones at a much later date," both CCI reports said, citing analyses of data from smartphone companies.

Indian research firm Datum Intelligence estimates that 50% of phone sales were online last year, up from 14.5% in 2013. Flipkart had a 55% share in online phone sales in 2023, and Amazon 35%.

Disclaimer: This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

Key Takeaways
  • The CCI’s findings highlight serious concerns regarding antitrust practices in India’s e-commerce and smartphone sectors.
  • Exclusive online launches by smartphone companies disproportionately impact traditional retailers, raising questions about market fairness.
  • The investigation underscores the growing tension between e-commerce platforms and local sellers, particularly in emerging markets.

Catch all the Business News , Corporate news , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

MoreLess
First Published:15 Sep 2024, 09:52 AM IST
Business NewsCompaniesNewsCCI finds alleged collusion between Samsung, Xiaomi and other smartphone makers and Amazon, Flipkart: Report

Get Instant Loan up to ₹10 Lakh!

  • Employment Type

    Most Active Stocks

    Axis Bank share price

    1,181.30
    03:29 PM | 4 OCT 2024
    5.85 (0.5%)

    Tata Steel share price

    166.75
    03:56 PM | 4 OCT 2024
    -0.2 (-0.12%)

    Oil & Natural Gas Corporation share price

    295.20
    03:58 PM | 4 OCT 2024
    3.1 (1.06%)

    Tata Motors share price

    930.70
    03:56 PM | 4 OCT 2024
    4.7 (0.51%)
    More Active Stocks

    Market Snapshot

    • Top Gainers
    • Top Losers
    • 52 Week High

    VIP Industries share price

    563.85
    03:57 PM | 4 OCT 2024
    40.8 (7.8%)

    Oil India share price

    572.25
    03:59 PM | 4 OCT 2024
    33.4 (6.2%)

    JK Paper share price

    489.95
    03:43 PM | 4 OCT 2024
    27.1 (5.86%)

    Home First Finance Company India share price

    1,245.35
    03:40 PM | 4 OCT 2024
    63.15 (5.34%)
    More from Top Gainers

    Recommended For You

      More Recommendations

      Gold Prices

      • 24K
      • 22K
      Bangalore
      77,575.000.00
      Chennai
      77,581.000.00
      Delhi
      77,733.000.00
      Kolkata
      77,585.000.00

      Fuel Price

      • Petrol
      • Diesel
      Bangalore
      102.86/L0.00
      Chennai
      100.85/L-0.03
      Kolkata
      104.95/L0.00
      New Delhi
      94.72/L0.00

      Popular in Companies

        HomeMarketsloanPremiumMint Shorts