SC tells CCI to approach Karnataka HC to vacate stay on probe against Amazon, Flipkart

In a relief to Amazon Seller Services, Flipkart Internet and others, the Supreme Court on Monday refused to entertain the Competition Commission of India’s (CCI) appeals seeking “expedition of proceedings and investigations” into alleged anti-competitive practices by the e-commerce giants and Intel Technology India.

The competition regulator had sought that the SC vacate two stay orders granted by the Karnataka High Court against its directions for probe against the e-commerce firms and the IT giant.

A Bench led by Justice AM Khanwilkar asked the CCI to approach the HC for any directions including vacation/ modification of the interim orders. It also requested the HC to decide the matter within six weeks from the date of the CCI filing a plea. Besides, the apex court gave liberty to the competition watchdog to revive its appeal as and when the occasion arises.

The CCI had passed a prima facie order under Section 26 (1) of the Competition Act, 2002, directing its investigative arm, the Director General, to conduct a probe into Amazon, Flipkart and their affiliated entities. The probe was started on a complaint by the Delhi Vyapar Mahasangh, which accused the e-commerce firms of having exclusive arrangements with smartphone manufacturers, deep discounting, preferential listing and exclusive tie-ups.

The CCI, in its January 13 order, said “exclusive launch coupled with preferential treatment to a few sellers and the discounting practices create an ecosystem that may lead to an appreciable adverse effect on competition”.

While seeking to vacate the stay orders of November 14, 2019, and February 14, this year, Solicitor General Tushar Mehta and counsel Arjun Krishnan, appearing for the CCI, argued that the probe was administrative in nature and did not affect the rights and liberties of anyone.

Senior counsel Abhishek Singhvi argued that there has been a delay of 209 days in approaching the SC and the CCI, without exhausting other options of moving the division bench, had directly filed an appeal in the apex court.

The CCI in its appeal said several investigations have been stalled and have not moved beyond the preliminary stage. Some of the issues raised in these investigations could have wide-ranging implications for consumer welfare and the respective relevant markets in which the parties operate, it said.

According to the appeal filed by Krishnan, the HC was being used as “a means to perpetuate an abuse of process by the firms, who appear to have something to hide from investigation. While the CCI proceedings are stayed, the market itself undergoes a change, and tends to become distorted” in favour of these companies and then in “such sensitive matters, the final relief may be ineffective or too late as a means to address the antitrust harm in question.”