Amazon-Flipkart probe: Want to create level playing field, says CCI lawyer

The Competition Commission of India (CCI) lawyer told the Court that when big players give discounts, they incur losses for a short time, but this pushes the smaller players out

The Competition Commission of India (CCI) on Friday argued to support its petition for the probe against e-commerce firms Amazon and Flipkart. The watchdog told the Karnataka High Court that Competition Act was brought in to create a level playing field and it wants more players that will help in having a better choice for customers and healthy competition. In this light, it is the duty of CCI to maintain the purity of competition.

“If small players, retailers and manufacturers are pushed out, then end consumer will not have the requisite choice,” Madhavi Divan, Additional Solicitor General (ASG), appearing for CCI, told the Court, according to law platform Bar & Bench. “When a big player comes and gives a discount, it is an investment for them. Studies show that these big players incur losses for that time and push the smaller players out. They won't get visibility later.”

The HC is hearing the petition filed by the CCI for the probe against e-commerce firms Amazon and Flipkart. This is a continuation of the matter when the Supreme Court (SC) in October last year declined to entertain the petition filed by CCI seeking to remove HC's stay on an investigation that the watchdog had ordered against Amazon and Flipkart related to anti-competitive business practices. This is because the matter had gone back to the HC. The SC had asked the HC to decide the CCI plea for vacating the stay on the probe against Amazon and Flipkart for the alleged anti-competitive practices.

“So when there is deep discounting, one has to be alert. What is the reason for this,” Divan told the HC. “So the point is that if prices are low, people will benefit, is wrong. Saying that CCI should not interfere is not appropriate.”

She contended that the Competition Act lays down the rules of the game and maintains a level playing field for all players and tackles anti-competitive agreements.

Earlier on Thursday, Divan had argued that there has been an exponential growth of the online market over the past year owing to the Covid-19 pandemic. This has made it extremely important to preserve the sanctity of the online market place. “Due to the pandemic, even people who want to touch and feel the product before buying, have switched to the online market,” Divan told the Court.

The matter will be heard next on March 2, 2021.

Amazon and its rival Flipkart have faced court cases related to probe by the CCI for alleged anti-competitive practices. The companies deny the allegations. Trader’s body Delhi Vyapar Mahasangh (DVM) had raised many allegations against the e-commerce companies. These included Amazon having exclusivity deals with phone brands and deep discounting related to products and predatory pricing. 

Also, the Confederation of All India Traders (CAIT) had made the allegation that Amazon has a direct relationship with the seller Cloudtail and was preferring it along with another seller Appario.

Cloudtail, one of the largest sellers on Amazon India, is owned by Prione Business Services, which is a JV between Amazon and Infosys co-founder N R Narayana Murthy’s Catamaran Ventures. Also, another seller, Appario Retail is a subsidiary of Frontizo, which is a JV between Amazon and Patni Group.

Earlier, Senior Advocate Gopal Subramanium who represented Amazon informed the Court that any discount or slash of the price is done by the dealer or seller of the product. He contended that Amazon has no say in that as it is just only a platform. The sellers that are shown to the consumers on the e-commerce platform are based on an algorithm. It shows the sellers to the consumers based on the price and delivery and higher ratings. He had also contended that discounts are given even in offline channel, during the festive season and this is up to the seller.