Walmart’s Flipkart, and Amazon, have not broken competitive rules in India through their respective efforts to promote certain brands or select certain merchants to sell across their platforms.
The Competition Commission of India (CCI) ruled earlier in the week that the two are not dominant sellers in the region, and thus are not abusing a dominant position in India’s online market space.
The ruling came in response to a petition earlier in the year filed by the All India Online Vendors Association, which represents a few thousand merchants. As reported in Economic Times, the petition had alleged preferential treatment by the now Walmart-owned Flipkart to certain merchants. The complaint had alleged that Flipkart Internet and Flipkart India had a “direct conflict of interest” with other firms that were selling on Flipkart. Discounts were hurting competition, said the association, and Flipkart has been able to enter into manufacturing verticals through the use of private labels.
The CCI order said that "no case of contravention of the provisions of Section 4 of the Companies Act is made out against" either Flipkart or Amazon. Within the ruling, too, was a definition of the broad market of selling goods in India through online marketplaces – where “it does not appear that any one player in the market is commanding any dominant position at this stage of evolution of market.”
"The Commission observes that the marketplace-based eCommerce model is still a relatively nascent and evolving model of retail distribution in India,” said the CCI, adding that there is growth potential and that consumers benefit from the eCommerce model. “The Commission is of the considered opinion that any intervention in such markets needs to be carefully crafted lest it stifles innovation,” said the ruling.
The Times noted that Flipkart had argued the relevant market should be considered one that is pan-India rather than B2C or retail, or even specific online or offline channels.
The association also filed a separate petition against Amazon last month that said the eCommerce giant had extended preferential treatment to Cloudtail and Appario, which are partly Amazon-owned.
The All India Online Vendors Association represents more than 3,500 businesses.