Karnataka High Court dismisses Amazon, Flipkart petitions to quash CCI probe

The traders have alleged that the business models currently operational have resulted in the displacement of tens and thousands of jobs and particularly hit the small mobile shop owners.
Representational image. (File Photo)
Representational image. (File Photo)

BENGALURU: The Karnataka High Court on Friday dismissed the writ petitions by e-commerce majors, Amazon, Flipkart to quash a probe ordered by the Competition Commission of India last year to probe into alleged anti-competitive practises by the e-tailers.

A Karnataka High Court division bench termed the petitions filed by the two companies as” devoid of merit and substance”  adding that the e-tailers should not feel shy of the CCI probe if they feel they are not in violation of the country’s competition laws. The Court stated that “By no stretch of imagination can inquiry be quashed at this stage” The division bench observed that the scheme of the Competition Act provided for sufficient safeguards for the appellants inform and appeal from the CCI’s orders.

This comes nearly a month after a single-member bench of the Karnataka High Court had allowed the CCI to continue probing the business models of Amazon and Walmart backed Flipkart after Delhi Vyapar Mahasangh, an affiliate of the Confederation of All India Traders has petitioned before the watchdog, alleging that the eCommerce players are involved in preferential treatment of sellers, deep discounting,as well as having stakes in seller entities in violation of the county’s competition laws.

The trader's body had earlier told this publication that it was in possession of email exchanges between the seller firms which clearly provides evidence of the companies having interests, stakes as well a common board of directors. The traders have alleged that the business models currently operational have resulted in the displacement of tens and thousands of jobs and particularly hit the small mobile shop owners.

Both Flipkart and Amazon have maintained that they are fully implementing the laws of the land. The union commerce ministry, meanwhile, is contemplating introducing a fresh set of e-commerce rules which are aimed at preventing market dominance by the leading players as well as provide a level playing field to small sellers. Sources said that the top e-commerce industry executives have held a series of talks with the union ministry informing the latter that the proposed rules will be detrimental to their businesses in the country.

Meanwhile, CAIT in a statement on Friday while welcoming the verdict of Karnataka’s division bench said that the commerce ministry should issue a fresh Press Note 2 under the FDI policy to prevent violations of the FDI violations by the firms.

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