Probe by CCI an abuse of power, Retail News, ET Retail
According to Amazon, the Delhi Vyapar Mahasangh — which represents a group of small and medium-sized retailers — has been filing identical cases in Delhi HC (dismissed) and Rajasthan HC (pending). Essentially questioning the motive behind such moves, the e-tailer said this group has now gone to the CCI with similar allegations of predatory pricing and preferential treatment to select sellers.
The senior advocate representing Amazon India said that the e-tailer had offered its recommendations to the CCI, which made it to the study released on January 8 on a self-regulatory approach for e-commerce. It was pointed that, if the regulator could reach out to Amazon for the same, why would they not approach the company in case of such allegations by the Delhi Vyapar Mahasangh.
“There must be a prima facie finding with adverse effects on competition… (it) would be essential and mandatory before CCI could order such an investigation,” said Amazon’s advocate. Amazon’s legal representatives also highlighted many of the initiatives. For example, doorstep grocery delivery actually increases competition instead of being anti-competitive. They cited previous judgments in cases of Star India and Airtel over CCI probe orders that were quashed on similar grounds as Amazon’s.Interestingly, a legal representative from Flipkart was also present at the hearing as the Walmart-owned e-tailer has been a respondent in the case by Amazon India. “Our counsel was present in the audience and did not actively participate,” Flipkart said in a statement.
Delhi Vyapar Mahasangh’s lawyer questioned why Amazon was oversensitive about the investigation and said it was facing various probes in the US and other markets. Further arguments in the case, including from the CCI, are expected on Thursday when the HC is expected to give its order on the “interim stay” on the probe.
Last week, the local arm of the Seattle-based e-commerce major moved the HC, seeking a stay on the CCI probe, slamming it as “perverse, arbitrary and untenable in law”. Amazon is seeking an interim stay on the matter, without which the US e-tailer said it would see “irreparable loss” and the same would hurt its brand goodwill.
On January 13, the CCI had ordered an investigation into the operations of US-owned e-tailers like Amazon India and Flipkart (in which Walmart owns a 77% stake). The probe was for various trade practices, including deep discounts and favourable terms to select sellers. This was done following a complaint by the Delhi Vyapar Mahasangh against the two e-tailers, who dominate the online retail market with over 70% share.
The CCI order to probe Amazon came days before Amazon CEO Jeff Bezos landed in India for a visit last month, where he announced $1 billion of new investment. Right after Bezos’s announcement, commerce and industry minister Piyush Goyal kicked up a row, saying Amazon wasn’t “doing any favour” to India by investing as it was to cover up losses. He even questioned how can a marketplace lose so much money.