Flipkart and Amazon violated antitrust regulations in India

Nitin Konde, Apoorva Bajj

Sep 16, 2024 — 3 min read

Flipkart and Amazon Violated Antitrust Regulations in India

An Indian antitrust investigation has determined that U.S. eCommerce giant Amazon and Walmart's Flipkart violated local competition laws by providing preferential treatment to specific sellers on their shopping websites, according to reports published by a reputable media outlet.

An investigation into Amazon and Flipkart was ordered by the Competition Commission of India (CCI) in the year 2020. The CCI was concerned that the two companies were reportedly giving preference to certain listings and were encouraging particular merchants with whom they had business connections.

What Exactly Do the Investigation Reports Reveal?

Investigators from the Competition Commission of India (CCI) concluded that Amazon and Flipkart had developed an environment in which preferred merchants appeared higher in search results, thereby displacing other vendors. The CCI investigators made this discovery in two distinct reports, each of which was around 1,696 pages long and submitted on 9 August.

According to both findings, which are not available to the public and are being published by a renowned media house for the very first time, each of the anti-competitive practices that were said to have occurred was investigated and confirmed to be genuine.

According to the two reports, "Ordinary sellers remained as mere database entries," that is the conclusion that was reached for both businesses. Both businesses have maintained in the past that they have not committed any wrongdoing and that their operations are in accordance with the laws of India.

The report will now be reviewed by the two corporations, and any objections will be submitted to the CCI staff before any potential fines are decided upon.

It Is a Big Setback for Both the Firms

Smaller merchants in the country continue to criticise Amazon and Flipkart for their business practices. These retailers claim that their companies have suffered in recent years as a result of the deep discounts that are offered online. The findings of the inquiry are the latest setback for Amazon and Flipkart.

A formal complaint was lodged by the Delhi Vyapar Mahasangh, a branch of the largest trade organisation in India, the Confederation of All India Traders (CAIT), which speaks for 80 million merchants. While responding to this complaint, CCI launched a full scale investigation on both the firms. As a response to the reports, CAIT expressed its approval of the conclusions of the CCI probe and stated that it would review the reports and "escalate the matter" with the federal government.

The eCommerce market in India is anticipated to be worth between $57 and $60 billion in 2023, and it is expected to surpass $160 billion in value by 2028, according to projections provided by the consulting firm Bain. The biggest competitors in this sector are Amazon and Flipkart.

Amazon has been accused of engaging in "anticompetitive and unfair strategies to illegally maintain its monopoly power," according to the Federal Trade Commission, who later filed a lawsuit against the corporation in the United States. Amazon has stated that the complaint filed by the FTC is illogical and would be detrimental to customers because it would result in increased pricing and delayed delivery times.