Setback for Amazon, Flipkart as Karnataka HC refuses to stop CCI investigation over ‘anti-competitive’ behavior

The division bench comprising of Justices Satish Chandra Sharma and Nataraj Rangaswamy observed that it found no reason to interfere with the order of the investigation by the Competition Commission of India (CCI). 

Calling the petition devoid of any merit or substance, the Karnataka High court on Friday dismissed a petition by Amazon and Flipkart seeking to challenge a probe conducted by the CCI into allegations of the two e-commerce companies being engaged in anti-competitive behaviour. The division bench comprising of Justices Satish Chandra Sharma and Nataraj Rangaswamy observed that it found no reason to interfere with the order of the investigation by the Competition Commission of India (CCI).

The order comes as a setback for the two biggest e-commerce players in India who have been engaged in a legal battle with the competition regulator for over two years. The matter pertains to a complaint filed by a group of businesses under the umbrella of Delhi Vyapar Mahasangh with the CCI in 2019, alleging that the e-commerce companies were engaged in anti-competitive behaviour. It further said that Amazon and Flipkart practised predatory pricing and gave preference to certain sellers on their platforms.

Taking cognizance of the complaint the CCI had then asked the director-general to investigate the matter. However, the probe couldn’t proceed as Amazon moved to the Karnataka HC which ordered a stay on it. In June 2021, a single-judge bench of the High court dismissed Amazon’s petition and allowed the probe to continue. The two companies faced a second setback on Wednesday as a division bench of the HC refused to overturn the June verdict.

Meanwhile, the government and the country’s e-commerce companies are also at loggerheads over the new e-commerce rules proposed by the Centre. While the Modi government has proposed strict, pro-consumer rules including a ban on flash sales, players like Amazon and Reliance say that the new rules will lead to losses and force them to change their business structures.

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