India's competition watchdog, CCI, has ordered an investigation into alleged competition law violations by Amazon and Walmart's Flipkart. This investigation order comes at a time when Amazon's chief Jeff Bezos is expected to visit India for a company event.
The CCI said that exclusive arrangements between mobile phone brands and e-commerce platforms, as well as allegations of e-commerce companies giving preferential treatment to certain sellers "merits an investigation".
Startup Street spoke with MM Sharma, head of competition law & policy at Vaish Associates and Chanakya Basa, partner at Justicetap and counsel for All India Online Vendors Association.
Sharma said, "The allegations are quite serious. The main allegation is that there is preferential selling, the platforms are not neutral anymore. It appears that platforms are not acting as neutral which they are supposed to be having. So, the main issue which the CCI has highlighted in the order is that they are giving preference to their own sellers, to the preferred sellers or to related entities for example."
Basa said, "We need to understand the modus operandi of how these deep discounts function. First, e-commerce platforms, let us call them Amazon or Flipkart, have an exclusive arrangement with the mobile manufacturers. The mobile brick and mortar stores, even though they can buy the products at the same price and sell it at the same price, are being isolated from the market. They are not even being given an opportunity to participate in the market."