The order of the Competition Commission of India (CCI) to hold an investigation, through its Director-General, on Amazon and Flipkart for alleged anti-competition activities was passed without application of mind as the CCI has ignored its own recent study on e-commerce market in India, which dealt with the operation of online marketplaces, including Amazon, it was contended on behalf of Amazon before the High Court of Karnataka on Wednesday.
The investigation was ordered following a complaint by the Delhi Vyapar Mahasangh (DVM), which had alleged that Amazon and Flipkart were giving preferential treatment to certain sellers, giving deep discounts. It was complained that the alleged preferential treatment was in violation of the provisions of the Competition Act, 2002.
Appearing for the petitioner, Amazon Seller Services Pvt. Ltd., which has questioned the CCI’s order, senior counsel Gopal Subramanium contended that the CCI’s January 13 order also failed to take into account an order passed by the CCI in a similar case filed by All India Online Vendors’ Association (AIOVA) against Flipkart, in which the CCI had suo motu called upon Amazon to give its inputs on its business model of online marketplace.
As the DVM had alleged that Amazon had violated conditions of the Foreign Direct Investment (FDI) policy, Mr. Subramanium said that Amazon has not violated FDI norms while contending that the CCI had no jurisdiction to go into the question of whether Amazon has violated any provisions of the FDI policy as it is the prerogative of the Union government to examine such issues.
The investigation was ordered despite lack of sufficient materials to pass such an order, Mr. Subramanium said and added that the CCI could have at least called upon Amazon to respond to the allegations made in DVM’s case before ordering an investigation.
While pointing out that Amazon was only an online marketplace and was not offering discounts as they were offered by the sellers, the senior counsel said that Amazon was not giving “preference” to any particular seller but the preference on the online platform was shown due to algorithm that analyses performances of sellers based on customer review, orders placed and other parameters.
Alleging that a series of attempts were being made to “harass” Amazon by a group of traders, Mr. Subramanium claimed that when an information by AIOVA was pending before CCI, the Confederation of All India Traders (CAIT) had filed a petition before the Delhi High Court making similar allegations against the petitioner.
After failing to get a favourable verdict from the Delhi HC, the CAIT filed a similar petition in Rajasthan HC but failed to get any injunction order against the petitioner and hence another petition was filed before Rajasthan HC by another trade body. Though DVM moved CCI, it was CAIT that had paid the fee for DVM’s information filed by the CCI, Mr. Subramanium claimed.
Proceedings adjourned
Justice P.S. Dinesh Kumar, who heard the arguments of Amazon, has adjourned proceedings till Thursday to hear the arguments on behalf of the CCI and the DVM before passing an interim order on a plea by Amazon seeking stay on the operation of the CCI’s January 13 order.
