Indian investigation finds Amazon, Walmart-owned Flipkart violated antitrust laws | Wilnesh News

Indian antitrust probe finds U.S. e-commerce giant Amazon and Walmart’s According to a Reuters report, Flipkart violated local competition laws by giving preference to certain sellers on its shopping site.

The Competition Commission of India in 2020 ordered an investigation into Amazon and Flipkart for allegedly promoting certain sellers with whom they had business arrangements and prioritizing certain goods.

In a 1,027-page report on Amazon and a separate report on Flipkart, both dated August 9, CCI investigators said the two companies were found to have created an ecosystem in which , preferred sellers are ranked higher in search results, crowding out other sellers.

“Each of the alleged anti-competitive conduct … was investigated and found to be substantiated,” said both reports, which are not public and were first reported by Reuters.

“The average seller is still just a database entry,” the two reports concluded for both companies.

Amazon, Flipkart and CCI did not immediately respond to Reuters’ requests for comment. They have previously denied wrongdoing and said their practices complied with Indian law.

The two companies will now review the report and raise any objections, before CCI staff take a decision on any possible fines.

The findings are the latest setback for Amazon and Flipkart in China, as their business practices continue to face criticism from smaller retailers who say their business has suffered in recent years due to deep discounts offered online.

The investigation was triggered by a complaint from Delhi Vyapar Mahasangh, an affiliate of the Confederation of All India Traders (CAIT), India’s largest trade body, representing 80 million retailers.

CAIT welcomed the CCI’s findings in a statement to Reuters and said it would study the reports and “escalate the matter” to the federal government.

Amazon and Flipkart are leaders in India’s e-retail market, which consulting firm Bain estimates will be worth $570-60 billion by 2023 and top $160 billion by 2028.

In the United States, the Federal Trade Commission has sued Amazon, accusing the company of using “anticompetitive and unfair tactics to unlawfully maintain its monopoly power.” Amazon said the FTC’s lawsuit was wrongful and would harm consumers by causing higher prices and slower delivery times.

Indian investigators raided certain sellers on Amazon and Flipkart during the investigation. Reuters investigation In 2021, the report, based on internal Amazon documents, showed that the company gave preferential treatment to a small group of sellers on its platform for years and used them to circumvent Indian law.

The company denies any wrongdoing, but the CCI has previously told an Indian court that the Reuters special report corroborated its evidence against Amazon.

The CCI investigation into Amazon reported that preferred sellers on the platform “gain advantage in (online) listings” and when a customer searches for any product, “his attention is drawn” to these listings.

The prioritization of mobile phone launches and deep discounts, including selling products below cost, “have had a catastrophic impact on existing competition in the market.”

In the Flipkart report, CCI said preferred sellers can get various services such as marketing and delivery at “extremely low cost”. CCI said Flipkart also allowed them to sell phones at steep discounts, which amounted to “predatory pricing” and eliminated competition.

Both reports said: “Anti-competitive behavior is not limited to mobile phone sales. It is equally prevalent in other categories of goods.”

Flipkart and Amazon tried for months to block the investigation through legal challenges in the courts, but the Supreme Court allowed the investigation to continue in 2021.

Last month, India’s commerce minister publicly criticized Amazon and said the company’s investments were often used to offset its business losses.

Amazon said in June last year that it would increase its investment in India to $26 billion in 2030, including its cloud business. It also plans to reach $20 billion in Indian merchandise exports by 2025.