SUMMARY
- CCI has asked for the financial statements from Amazon and Flipkart to finalise the penalty in the anti-trust investigation into the two ecommerce majors.
- CCI has the power to impose fines up to 10% of a company’s global turnover from the previous three fiscal years for engaging in anti-competitive practices.
- Amazon and Flipkart were found guilty of violating the nation’s competition laws by favoring certain sellers on their platforms.
The Competition Commission of India’s anti-trust investigation into Amazon and Flipkart has advanced to its concluding phase, with the regulatory body asking for the financial statements from the two ecommerce majors to finalise the appropriate penalty, as reported by Mint on September 23.
According to the Mint report, the provision of annual revenue details will be crucial in determining the penalties for the case, which has been ongoing for four years, following the defense presentations by the two firms.
The regulatory authority has the power to impose fines up to 10% of a company’s global turnover or its income from the previous three fiscal years for engaging in anti-competitive practices, as per an amendment to the competition law enacted in 2023.
Earlier, it was anticipated that the anti-trust regulator would sanction Amazon for alleged anti-competitive activities.
This development follows a recent investigation by the Indian antitrust body, which found Amazon and Flipkart guilty of violating the nation’s competition laws by favoring certain sellers on their platforms.
In separate reports, the Competition Commission of India identified a lack of a level playing field, where the two companies favored sellers with whom they had business agreements and prioritized certain listings, thereby disadvantaging other sellers.
The Competition Commission of India’s investigation arm has confirmed the allegations against Amazon Seller Services Pvt Ltd, with sources indicating that a notice would be issued shortly.
Amazon has been under increased scrutiny in India. In August, commerce minister Piyush Goyal questioned whether the rapid expansion of e-commerce firms in the country was a cause for concern or something to be celebrated.
On September 20, CNBC-TV18 reported that the trade promotion body DPIIT had forwarded a complaint to the Competition Commission of India regarding quick commerce companies, suggesting that the commission might take suo motu notice of the matter.
Amazon and Flipkart are not the sole companies facing scrutiny for their business practices in India. A probe by the Competition Commission of India into Apple has revealed that the iPhone manufacturer has been accused of abusing its dominant position in the app store market.
The Competition Commission of India’s report accused Apple of implementing unfair trade practices against developers. However, the report was subsequently retracted after Apple expressed concerns regarding the disclosure of confidential company data to competitors.
Google, a subsidiary of Alphabet, is also under investigation for alleged anti-competitive behavior in the Indian online advertising market.
While the dominant e-commerce firms have operated with a degree of autonomy in India’s digital market thus far, the Ministry of Corporate Affairs has introduced the draft digital competition bill aimed at regulating major entities based on factors such as turnover, gross merchandise value, global market capitalization, user base, and more.
The rapid expansion of quick commerce firms like Blinkit, Zepto, and Swiggy Instamart has also raised concerns over issues such as predatory pricing and deep discounting strategies.
