Karnataka HC to hear petitions from Amazon, Flipkart, CCI in Jan against alleged marketplace malpractices

CAIT vs Amazon, Flipkart: Following the Supreme Court’s (SC) October 26 directive to Karnataka High Court (HC) to decide whether Competition Commission of India (CCI) can probe into alleged business malpractices by Amazon and Flipkart, the high court on Wednesday decided to hear petitions from all the parties on January 18, 2021, to finally dispose of the matter. CCI had earlier filed an appeal in the apex court against the interim stay order by the Karnataka HC to probe e-commerce marketplaces, however, SC had declined to intervene.

“Karnataka HC didn’t want to hear all the petitions separately. Hence, it informed all the parties that it would hear them in one go on January 18. This might take two-three days but the court will finally dispose of the matter. Petitions from Flipkart and Amazon on CCI probe, ours and Delhi Vyapar Mahasangh and CCI’s also will be heard next month,” Praveen Khandelwal, Secretary-General, Confederation of All India Traders (CAIT) told Financial Express Online.

Khandelwal claimed that Flipkart’s counsel stated that CAIT’s submission is not required to be heard for the final disposal. However, “the court allowed Delhi Vyapar Mahasangh and CAIT to file their reply to the petition this week.” Amazon and Flipkart had filed writ petitions in February 2020, in Karnataka HC against the CCI order following a complaint by the Delhi Vyapar Mahasangh against Amazon and Flipkart over alleged deep discount of prices and partnering with select sellers. A copy of the Amazon petition was seen by Financial Express Online.

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CCI had directed the DG office for completing the investigation in 60 days. However, the two companies had already denied the allegations mentioned in the CCI order. The court had ordered a stay on the investigation following which the CCI had filed a petition before the SC in October 2020. Amazon, in its petition, had said that the findings of the CCI order are “perverse, arbitrary, untenable in law,” and that the “present Impugned order has been passed without prima facie application of mind” and that “irreparable loss and injury would be caused to the petitioner and its reputation/goodwill.” The company had urged the court for “quashing and setting aside the Impugned order dated January 13, 2020” and “direct the stay” of the order “till the disposal of the writ petition.”

CAIT had last month written to Prime Minister Narendra Modi arguing that big e-commerce companies having deep pockets are leaving no stone unturned in monopolizing the e-commerce business and retail trade of India with their malpractices and violating FDI policy. The confederation has been long claiming that the online marketplaces have been undertaking “predatory pricing, deep discounting, loss funding and exclusivity of various products, which are not allowed under the FDI policy,” it had said in a statement last year. However, both Amazon and Flipkart have repeatedly claimed complete compliance with the FDI laws and that they are marketplaces facilitating the buying and selling of goods between customers and sellers.