CCI to penalize Amazon for alleged anti-competitive practices: Report
The Competition Commission of India (CCI) is preparing to impose a penalty on Amazon for alleged anti-competitive behavior, according to a Mint report. The competition regulator's investigation arm has reportedly confirmed these charges against Amazon Seller Services Pvt Ltd, and is expected to issue a notice soon. This development sets the stage for the final adjudicating order in this case.
CCI to share investigation findings with Amazon
The CCI, which recently received the report against Amazon, plans to share these findings with the company. Following this, a hearing will be conducted before issuing a final order. The commission is now in the process of sending these findings to Amazon and will grant the company an opportunity to present its case at a hearing before issuing any final order along with penalty.
Amazon could face significant fine under new rules
Under new regulations, the CCI has the authority to impose penalties up to 10% of a company's global turnover. "Penalty would be decided under the amended competition law providing for a maximum penalty of 10% of global turnover of the enterprise," said one person familiar with the matter told Mint. This potential fine could represent a significant financial impact for Amazon if enforced by the commission.
Increased scrutiny on e-commerce giants in India
The US-based e-commerce giant has been under increased scrutiny in India. Last month, Commerce Minister Piyush Goyal questioned if the rapid growth of e-commerce companies in the country was a "matter of concern" or something to be proud of. He also raised concerns about predatory pricing by these firms and their impact on the Indian economy.
Anti-competitive behavior allegations against Amazon and Flipkart
The cases against Amazon and Flipkart were initiated based on a complaint filed by a Delhi-based trade association. The issues investigated by CCI include whether the e-commerce giants have preferred sellers; whether these sellers have a direct or indirect nexus with the platforms; and whether exclusive product launches of mobile phones, alleged preferential treatment to a few sellers, and discounting practices affected competition in the market.
Legal experts urge judicious application of high penalty provision
Legal experts have urged that the provision to levy a high penalty should be used judiciously and only when the severity of the violation warrants it. Sonam Chandwani, Managing Partner at law firm KS Legal & Associates, stated that imposing a penalty of up to 10% of a company's global turnover marks a significant shift in India's competition law enforcement. However, she emphasized that such a high penalty should be applied judiciously and reserved for clear, egregious violations.
