BENGALURU: There is a new twist in the ongoing tussle between e-commerce companies and traders as the National Company Law Appellate Tribunal (NCLAT) on Wednesday directed the anti-trust watchdog Competition Commission of India (CCI) to initiate a probe against Flipkart for misusing its dominant market position.
NCLAT also asked CCI’s director-general to probe the unfair practices of Walmart-backed Flipkart.
A three-member NCLAT bench said it has set aside the CCI’s 2018 order that stated Flipkart is not in a dominant position in the e-marketplace in the country, hence there is no question of abusing their position as claimed by the All India Online Vendors Association (AIOVA).
AIOVA later appealed to NCLAT, alleging Flipkart is entering into selective agreements with certain sellers, violating Section 4 (2) (a) of the Competition Act and indulging in deep discounting, thus denying fair market access to other sellers.
Legal experts told this publication that the NCLAT’s order could affect the interim stay directed by the Karnataka High Court last month on the CCI’s probe into the alleged malpractices of Amazon and Flipkart.
Amazon’s legal counsel team had, according to sources, extensively quoted CCI’s 2018 order favouring Flipkart, and hence quashing the same order is likely to impact the judgement.
“The NCLAT order is a big shot in the arm of CAIT, which is spearheading a legal fight and other agitation against Amazon and Flipkart. This order is certainly going to impact the stay granted by the Karnataka High Court against investigation into Amazon and Flipkart matter. Our lawyers will examine the implications of the order, then we will decide our future course of legal action,” said Praveen Khandelwal, secretary-general, Confederation of All India Traders.
In January 2020, CCI had asked its director-general to complete the probe into the alleged business malpractices of Amazon and Flipkart within 60 days after a Delhi-based traders body filed a fresh appeal accusing the e-commerce giants of violating various provisions of the Competition Act. Meanwhile, Flipkart, when contacted, said, “We understand that the NCLAT has issued an order in relation to the AIOVA appeal. We are currently awaiting a copy of the order.” Amazon India, when contacted, didn’t reply to the query.