Recently, Delhi Vyapar Mahasangh,a trader’s body filed a complaint with Competition Commission of India (CCI) against Flipkart and many other e – commerce giants for their luring discounts on smartphones and gadgets. The CCI ordered an investigation against Amazon and Flipkart. In return Flipkart filed a writ petition (W.P) in Karnataka High Court seeking to quash the order passed by the CCI which made Flipkart guilty of Anti- Competitive Practices.
Flipkart in its writ petition alleged that an investigation has been ordered by CCI without the existence of any “prima facie” case. Flipkart in its petition also states that there is no Anti-Competitive Agreement existing between Flipkart and other enterprises as per the allegations of Delhi Vyapar Mahasangh. Flipkart furtheralleged that the order passed by CCI against Flipkart is contrary to the orders passed by the CCI in the past.
Further the Petition also mentions that back in April, 2019, the CCI had initiated a market study titled, “Market Study on E- Commerce in India”. When conducting the market study CCI had obtained submissions from various stakeholders. In the Market Study, the CCI had advocated for a “non-interventionist” and “self-regulation” approach towards e-commerce players.
Flipkart added that allegations made by Delhi Vyapar Mahasangh namely, “deep discounting, exclusivity arrangement and preferential treatment” all fall within the scope of Foreign Exchange Management Act. Also, the Enforcement Directorate is presently investigating Flipkart for the same allegations thus CCI has no locus standi to investigate the same case.
Lastly, Flipkart claimed, that the CCI order is contrary to the principles laid down by the Supreme Court in the case of CCI V. Steel AuthorityAIR 2010 where the Apex Court held that while passing an order under Section 26(1) of the Competition Act2002, the CCI has to express its mind in no uncertain terms that a “prima facie” case exists.
Thus, on the basis of above submission Flipkart prayed to quash the order passed by the CCI. Also, it pleaded to stay any further operations and investigations by CCI.
Earlier this month Amazon in the same case filed a petition in the Karnataka High Court to quash the order passed by CCI against them for their alleged violations of Competition Law.
In its Petition, Amazon stated that the CCI order was passed “without application of mind” and that it would cause irreparable loss to the reputation of the company if an investigation is allowed in the matter.The Karnataka High Court had granted Amazon an interim relief by staying all the investigation ordered by CCI.
The Indian Lawyer