Online Sellers Challenge Indian Antitrust Investigation Against Flipkart and Amazon

Three online sellers operating on Walmart-owned Flipkart have taken legal action against the Indian antitrust watchdog over an investigation that found they, along with Flipkart and rival Amazon, violated competition laws. According to court filings reviewed by Reuters, the sellers are seeking to overturn the findings of the investigation and halt further proceedings by the Competition Commission of India (CCI).

This legal move comes on the heels of an August report by the CCI, which concluded that Amazon, Flipkart, and certain associated sellers, including smartphone brands, breached local competition regulations. The investigation was prompted by complaints from brick-and-mortar retailers represented by the Confederation of All India Traders, who accused these eCommerce giants of providing unfair advantages to select online sellers.

In their filings with the High Court of Karnataka, the three Flipkart sellers—CIGFIL Retail, Wishery Online, and Xonique Ventures—argue that their involvement in the investigation was mishandled. They assert that while they were asked to submit data to assist the CCI, they were later named as defendants, which they contend violates due process rights. “The alleged investigation … is arbitrary, opaque, unfair,” the sellers claimed in their submissions.

Related: Flipkart Sellers Sue Indian Antitrust Watchdog Over Competition Law Violation Findings

The legal challenge from these sellers has the potential to further delay the ongoing investigation, which originally began in 2020. Flipkart, one of India’s leading eCommerce platforms, faces increased scrutiny as it competes with Amazon in a rapidly growing market.

As this situation develops, both Flipkart and the CCI have yet to respond to requests for comment from Reuters. The court will likely hear the sellers’ arguments next week, which could have significant implications for the future of online retail in India.

In a related development, a former Amazon seller recently filed a lawsuit against the CCI, securing an interim injunction that prevents the investigation from advancing. The seller’s court documents, also reviewed by Reuters, assert that they were not properly notified before being implicated in the case.

Source: Reuters