Online Vendors on Flipkart, Walmart’s Indian Subsidiary, Sue Antitrust Regulator

Nitin Konde, Apoorva Bajj

Oct 1, 2024 — 2 min read

Online Vendors on Flipkart, Walmart’s Indian Subsidiary, Sue Antitrust Regulator

According to court documents viewed by a media house, three online vendors who operate on Flipkart, owned by Walmart, have filed a lawsuit against the Indian antitrust watchdog following an inquiry that discovered violations of competition regulations by both Flipkart and competitor Amazon. According to a media report, antitrust investigations conducted in August revealed that Flipkart and Amazon, two of their smartphone brands and sellers, had broken local competition laws by giving particular online sellers an unfair advantage and giving priority to particular listings. This is why the submissions have been made.

The three platform vendors filed requests in the Karnataka High Court to "set aside" the investigation findings and halt the Competition Commission of India (CCI) procedure in an attempt to stop the crucial proceedings.

This Move Will Delay the Investigations

The investigative process, which began in 2020 when brick-and-mortar shops of the Confederation of All India Traders protested to the watchdog, may be delayed by lawsuits from sellers on Amazon and Flipkart. However, Flipkart and Amazon have not acknowledged any misconduct. According to court documents, three Flipkart sellers—CIGFIL Retail, Wishery Online, and Xonique Ventures—claim in their cases that they were asked to provide information to authorities throughout the inquiry but were subsequently identified as suspects, which is against due process.

The sellers claimed in three different court files that the "alleged investigation... is arbitrary, opaque, and unfair." The case is expected to be heard next week.

Ex-Amazon Vendor Files Lawsuit Against CCI

Notably, this transpires concurrently with a lawsuit that a former Amazon seller has filed against the CCI in connection with the ongoing inquiry. Additionally, the vendor Appario Retail stated that the CCI probe needs to be put on hold.

Experts at the time of the news said that it was significant since it was the first significant obstacle to the ongoing CCI investigation against Flipkart and Amazon. Natasha Treasurywala, Partner, Desai & Diwanji, previously stated in an interview with a media outlet that the seller who has contested the CCI investigation was initially a joint venture between Amazon and its Indian partner. As such, the lawsuit's origin story might be a little off. On the other hand, the CCI will undoubtedly face some pressure if more sellers come forward.

The fact that additional sellers have now banded together to oppose the CCI raises the possibility that the case's resolution will be postponed. Amazon and Flipkart's attempts to get the antitrust investigation overturned have already resulted in multiple delays for the 2020 investigation. Eventually, though, the CCI carried out its inquiry and discovered, among other things, that Flipkart and Amazon had signed exclusive contracts with smartphone manufacturers like Samsung and Xiaomi, which was against the law.