CCI concludes Flipkart, Amazon not violating norms, rejects vendors' complaints
Fair trade watchdog Competition Commission of India (CCI) has concluded that the business practices of Flipkart and Amazon aren't in violation of competition norms and rejected allegations of abuse of market dominance made by a grouping of online vendors. The CCI's ruling came on a complaint filed by the All India Online Vendors Association, a grouping of over 2,000 sellers on various e-commerce marketplaces.
Allegations made against Flipkart India, Flipkart Internet
The allegations were made against Flipkart India Pvt Ltd, which is into wholesale trading/distribution of books, mobiles, computers and related accessories, and Flipkart Internet Pvt Ltd, which is engaged in e-commerce marketplace business under the brand name Flipkart.com. To assess the merits of the complaint, CCI considered 'services provided by online marketplace platforms for selling goods in India' as the relevant market.
CCI doesn't feel any one player is dominating the market
In its November 6 order, the watchdog said that looking at the present market construct and structure of online marketplace platforms in India, "it doesn't appear that any one player in the market is commanding any dominant position at this stage of evolution of market".
CCI concludes there's no abuse of dominant market position
The CCI concluded that there's no violation of Section 4 of the Competition Act, that pertains to abuse of dominant market position. It added that the Flipkart marketplace is required to comply with conditions applicable to entities involved in the business of e-commerce, as set out in the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017.
Should hold preliminary conference with Amazon too, says CCI
Though the complaint was filed against Flipkart entities, the regulator said it deemed it appropriate to hold a preliminary conference with Amazon Seller Services Pvt Ltd, as that's also a key player in the market. Citing the market construct and the context of examining allegations against Flipkart, the CCI noted that there's also no case of contravention of Section 4 by Amazon as well.
Intervention in e-commerce marketplace should be carefully crafted: CCI
Further, the regulator observed that the marketplace-based e-commerce model is still a relatively nascent and evolving model of retail distribution in India. "Recognizing the growth potential as well as the efficiencies and consumer benefits that such markets can provide, the Commission is of the considered opinion that any intervention in such markets needs to be carefully crafted lest it stifles innovation," the order said.
