Home / News / India /  SC stays order demanding Flipkart probe

In an interim relief to Flipkart, the Supreme Court on Wednesday stayed the National Company Law Appellate Tribunal order which directed the Competition Commission of India (CCI) to launch a probe against the e-commerce firm Flipkart on the allegations of abuse of dominant position in the market.

The apex court bench headed by Chief Justice SA Bobde also issued notice to All India Online Vendor Association (sellers association) and CCI.

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Senior Advocate Harish Salve, representing Flipkart, submitted that the predatory pricing is an issue to be considered against the dominant player as a case of abuse of power but his client has not been held as a dominant player.

The bench also comprising Justices AS Bopanna and V Ramasubramanian observed that CCI has categorical mentioned in the findings of a case that Flipkart does not have a dominant position. The court further added that the NCLAT findings on the dominant position have not been reversed as of now.

Subsequently, The Top court asked counsels appearing for vendors association that the matter could be remanded back to NCLAT if they agreed that NCLAT should have considered the issues of dominant position.

The Vendor’s counsel pleaded to argue the matter in the court instead of agreeing to the proposition.

The three-judge bench have issued notice to the parties involved and will hear the case at length on the next date.

Abdullah Hussain, Partner, L&L Partners, talking to Mint explained Flipkart’s and CCI’s position in the pending legal battles. He said, “ Flipkart has now successfully stayed both investigations against it - one stay was granted by the Karnataka High Court and now this one by the SC. For CCI this is another blow as several orders initiating an investigation have been stayed by various High Courts around the country. The ultimate decision of the SC will decide whether the matter ends here or whether the NCLAT decision ordering an investigation will be upheld as was the case with Uber in 2019."

On March 4, the NCLAT has set aside the earlier order passed by the CCI absolving Flipkart of unfair practices using its dominant position and directed it to ask its probe arm Director General (DG) to investigate into the allegations.

The NCLAT said that the All India Online Vendors Association (AIOVA) had successfully made its case here.

In November 2018, the AIOVA had approached the CCI alleging abuse of market dominance by e-commerce major.

The AIOVA had alleged abuse of market dominance against Flipkart India Pvt Ltd, which is into wholesale trading/distribution of books, mobiles, computers and related accessories, and e-commerce marketplace Flipkart Internet Pvt Ltd.

It had alleged that small vendors have become allies of the big vendors and suppliers to leading sellers such as Cloudtail, WS Retail, etc on the Flipkart and Amazon platforms, rather than selling directly to consumers through the online e-commerce marketplace sites.

However, passing an order on November 6, 2018, the CCI had held that the business practices of Flipkart and Amazon are not in violation of competition norms and rejected allegations of abuse of market dominance made by the AIOVA.

\The CCI had ruled that looking at the present market construct and structure of online marketplace platforms in India, “it does not appear that any one player in the market is commanding any dominant position at this stage of evolution of market".

The AIOVA, as mentioned in the CCI order, is a group of over 2,000 sellers selling on e-commerce marketplaces such as Flipkart, Amazon, Snapdeal etc.

(PTI contributed to the story)

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