Samsung Challenges Indian Antitrust Investigation, Calls Raid “Unlawful”

Samsung Electronics has taken legal action against India’s Competition Commission (CCI), alleging unlawful conduct during a raid linked to an antitrust probe involving Amazon and Flipkart, according to a court filing reviewed by Reuters. The South Korean tech giant is contesting the findings of the CCI, which in August accused Samsung and other smartphone makers of collaborating with the e-commerce platforms to launch products exclusively online, a practice deemed anticompetitive.

The controversy stems from a 2022 raid conducted by the CCI at a vendor associated with Amazon, where Samsung alleges that three of its employees were detained, their mobile devices confiscated, and confidential data copied. In its 32-page legal filing dated October 11 and submitted to the High Court in Chandigarh, Samsung argued that the search operation was “patently illegal.” The company demanded that the seized material be returned and excluded from any investigation proceedings.

“The entire search exercise undertaken … is patently illegal, and any material collected thereunder should not be relied upon,” Samsung’s Indian unit stated in its court documents. The company further sought an injunction to prevent the CCI from using the seized data, claiming it had cooperated as a third party in the investigation.

Ongoing Legal Battle

Samsung is among 23 entities that have secured temporary relief from high courts across India, halting CCI proceedings. The watchdog, however, has escalated the matter, urging India’s Supreme Court to consolidate the various challenges, accusing companies of attempting to derail the investigation.

Related: Samsung Ends Antitrust Dispute with Broadcom After Five Months

The CCI’s probe centers on allegations that Amazon and Flipkart have violated competition laws by favoring specific sellers and engaging in exclusive product launches, practices criticized by brick-and-mortar retailers. Both e-commerce giants deny any wrongdoing.

Implications for Samsung

The inclusion of smartphone manufacturers in the investigation has heightened compliance challenges for companies like Samsung, which holds a significant 14% share of India’s smartphone market, per Counterpoint Research. Exclusive product launches on platforms such as Amazon and Flipkart were singled out in the CCI’s August findings as detrimental to free and fair competition.

Samsung maintains that its involvement in such practices has been misrepresented and argues that it was wrongly implicated despite cooperating with the investigation. The company’s legal filing underscores its assertion that the investigation findings against it lack merit.

Broader Context

India’s smartphone market is increasingly reliant on online sales, with 50% of purchases occurring through e-commerce platforms in 2022, a significant rise from 14.5% in 2013, according to Datum Intelligence. This shift underscores the importance of fair competition practices in the digital economy.

Source: Reuters