Amazon, Flipkart Under CCI Radar For Allegedly Hurting Small Sellers, Preferential Treatment

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The Competition Commission of India (CCI) is ordering a wider probe on Amazon and Walmart's Flipkart. CCI has alleged violations of competition law, a major set back for the US-led e-retail giants operating in India. The review allegations note that the companies are promoting 'preferred sellers', which is affecting smaller sellers on the platform.

Amazon, Flipkart Under CCI Radar For Violating Competition Law

 

Amazon, Flipkart Under CCI Radar

The complaint was lodged by Delhi Vyapar Mahasangh, a group representing small- and medium-sized businesses. According to the allegations, several Amazon and Flipkart promoted preferred sellers, with whom they were affiliated or controlled directly or indirectly.

CCI has highlighted four alleged anti-competitive practices that include the exclusive launch of smartphones by the online retail firms; promoting preferred sellers on the website and app; deep discounting practices; and lastly, preferential treatment for some seller listings over others.

Some offline retailers have further alleged that Amazon and Flipkart violate India's foreign investment rules. The massive discounts on the sites hurt smaller traders, reports Reuters. CCI expects the investigatory probe should complete within 60 days. Typically, such cases have extended for longer periods.

Amazon, Flipkart Under CCI Radar For Violating Competition Law

CCI notes that India is one of the fastest-growing markets globally. The country is the fastest-growing e-commerce market with revenue this year expected to reach $120 billion, triple its size in 2017, CCI notes. However, several issues are clouding the online market, which the government body aims to clear.

 

What Amazon, Flipkart Say

Both Amazon and Flipkart are willing to comply with the review. Flipkart says it is 'fully compliant' with all the laws of India and the company is reviewing the CCI order, says senior VP Rajneesh Kumar.

Amazon, on the other hand said: "We welcome the opportunity to address allegations made about Amazon; we are confident in our compliance and will cooperate fully with the CCI." Amazon's CEO Jeff Bezos is scheduled to visit the country for discussions with government officials this week, further hinting at the probe.

Over the past couple of years, the Indian government has introduced stringent foreign investment rules. The CCI probe is the latest road bump for US-based companies and some allegations have been against both the companies.

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