Karnataka High Court quashes Amazon, Flipkart plea against CCI probe

The Karnataka High Court on Friday dismissed a petition filed by ecommerce giants Amazon and Flipkart challenging a probe ordered by the Competition Commission of India (CII) against the two companies for alleged violations of provisions of competition laws.

A division bench of Justice Satishchandra Sharma and Justice Nataraj Rangaswamy while terming the plea as “devoid of merits and substance”, said, the decision that will have a bearing on the larger e-commerce ecosystem of India.

“Not finding any reason to interfere in the order of the tribunal and therefore the petition is dismissed,” said the judges.

Earlier in June, a single-judge bench had also turned down ecommerce player’s plea to restrain the antitrust body to continue its investigation against the two marketplaces under Section 3 of the Competition Act that deals with anti-competitive agreements.

The Competition Commission of India is investigating allegations that the two companies promote select sellers on their e-commerce platforms and use deep discounts to stifle competition.

CCI had ordered the probe in January last year, saying it had “prima facie” evidence to begin an investigation under Section 26 (1) of the Competition Act, 2002. following which both the companies had moved the High Court seeking quashing of the probe order. The Karnataka High Court on February 14, 2020 granted an interim stay on the investigation ordered by the CCI. Following this, the CCI had approached the Supreme Court, which on October 26, 2020, asked it to approach the High Court.

The issue dates back to October 2019 when the Delhi Vyapar Mahasangh (DVM), a group representing small and medium business owners in the national capital, submitted a plea with CCI against Amazon and Flipkart accusing them of anti-competitive practices, predatory pricing and preferential treatment of sellers among others.