Amazon seeks interim stay on CCI order, cites 'irreparable loss and injury'

E-commerce giant Amazon on Monday filed a writ petition in the Karnataka High Court, seeking an interim stay on the Competition Commission of India’s (CCI’s) order on probing some of its business practices.
 
Investigation by the CCI was launched last month after the Delhi Vyapar Mahasangh (DVM), a traders’ body, filed a complaint against e-commerce players giving deep discounts on online sales of smartphones and cherry-picking sellers.
 
The investigation covers Amazon and rival Flipkart, which Walmart owns now.
 
Amazon asked the court that an interim stay be granted on the proceedings, or else a probe would cause “irreparable loss and injury” to the e-commerce player’s “reputation/goodwill”.
 
It said the CCI order “has been passed without prima facie application of mind and will cause serious prejudice to the petitioner (Amazon). Its findings are perverse, arbitrary, untenable in law”.
 
Amazon has filed a “Writ of Certiorari” under Article 226 of the Constitution, by which there can be a judicial review of a decision of a lower court or an administrative agency. The choice of the Karnataka High Court is because Amazon India’s registered office is located in Bengaluru, Karnataka.
 
In the past, the CCI, after studying deep discounts in e-commerce, had said it was not a matter of competition.
 
The DVM has alleged Amazon and Flipkart influence pricing by providing discounts as well as inventories to sellers.
 
Further, it has complained that Amazon and Flipkart have done exclusive arrangements, deep discounts, and preferential listing.
 
The DVM has said these are exclusionary tactics with adverse effects on competition.
 
However, according to Salman Waris, managing partner at New Delhi-based specialist technology law firm TechLegis Advocates & Solicitors, Amazon will not get immediate relief because reports suggest that the DVM had filed a caveat with the Karnataka High Court in the past. As a result, Amazon will not be able to get an instant stay on the order without the arguments being heard in the court.
 
Amazon and Flipkart did not respond to requests for comment until the time of going to press.
 
The two firms have the lion’s share of the e-commerce market in India, and incurred the ire of small traders, who have time and again alleged that their (of Amazon and Flipkart) platforms do not follow foreign direct investment (FDI) norms, and their business practices harm the trading community.
 
“Amazon claims it follows the FDI policy; then why is it opposing investigation?” asked Praveen Khandelwal, secretary general, Confederation of All India Traders (CAIT).  “Let investigation be conducted by the CCI. The stay application by Amazon is an ample testimony to the fact that all is wrong with its business model.”
 
India’s e-commerce market is estimated at around $40 billion, and makes for less than 10 per cent of the overall retail pie, which is estimated at close to $700 billion.