Flipkart has filed a petition before the Karnataka high court, challenging an investigation into e-commerce firms by the antitrust regulator following allegations of predatory pricing and preferred treatment to certain sellers.
The Walmart-owned company’s petition, reviewed by Mint, comes just two weeks after Amazon’s plea against the Competition Commission of India’s (CCI’s) January order initiating the probe against e-commerce firms for alleged misuse of their dominant positions. The high court on 14 February granted an interim stay on the probe and asked all parties to file their views within eight weeks.
Flipkart, which is a respondent in the Amazon-CCI case, has now filed a petition in the court questioning CCI’s action.
A Flipkart spokesperson on Friday said: “The High Court of Karnataka has issued an interim stay of the CCI investigation. We are a party to the CCI order and a respondent in Amazon’s writ against the order. Given this position and the high court stay, as a procedural matter, we have filed a writ."
The petition is expected to be heard shortly.
“...The order has directed an investigation without making a determination of existence of essential jurisdiction and in a pre-determined manner by treating allegations of abuse of dominance as an ‘anti-competitive’ agreement," said Flipkart’s petition.
It added that CCI cannot examine matters that directly fall under the Foreign Exchange Management Act, especially when the Enforcement Directorate is examining the same issues.
“...To act on the information submitted by the informant whose credentials are in doubt and motives questionable is completely unfair," said Flipkart in its filing. “By passing impugned order, CCI is contradicting its own earlier orders and precedents and cannot change its stand from time to time."
CCI had directed a probe into Flipkart and Amazon following allegations of deep discounting, preferred sellers and exclusive launches of specific smartphone brands that would have a bearing on competition.
The Delhi Vyapar Mahasangh, a group representing small and medium businesses, in its complaint to CCI had alleged that e-commerce platforms were funding discounts that was having an adverse impact on small businesses.
The Karnataka high court has temporarily upheld the arguments made by Amazon and Flipkart. The interim stay on the investigation gives a breather to Amazon and Flipkart amid intensifying scrutiny of e-commerce firms by Indian authorities.
With CCI increasing scrutiny on internet businesses, Amazon and Flipkart, despite their rivalry, have set aside their differences to take on the regulator and trade bodies, and protect their individual interests. Flipkart and Amazon together have the largest share of India’s fast-growing e-commerce market, which stood at $30.8 billion in 2019, according to RedSeer Consulting.