Supreme Court refuses to stop antitrust investigation against Flipkart, Amazon

Amazon, Flipkart approached Supreme Court after Karnataka High Court ruled against them (File)

New Delhi:

The Supreme Court on Monday refused to suspend an investigation into the business practices of Amazon and Flipkart, dismissing their requests to suspend an investigation by the Indian Competition Commission (ICC).

The ICC ordered the investigation last year – for allegedly promoting certain sellers on their e-commerce platforms and using business practices that stifle competition. The investigation also focuses on accusations that the two are circumventing Indian laws by creating complex business structures.

The investigation sparked public feuds between the two e-commerce giants and the government. The two companies deny any wrongdoing and have mounted multiple legal challenges,

They argued that the ICC failed to meet internal minimum evidence criteria before ordering its investigation, and that it failed to identify any agreements that would violate existing laws.

However, a three-member bench led by Chief Justice NV Ramana is still not convinced by today’s arguments, and even said that Amazon and Flipkart should volunteer for such inquiries.

“We’re waiting for organizations like Amazon and Flipkart… big organizations… they have to volunteer for investigation and transparency. We’re waiting for that… and you don’t even want (a) investigation,” the chief justice said, adding, “You must submit and an investigation must be conducted.”

The e-commerce giants have had four weeks to join in the investigations against them.

Amazon and Flipkart, which is owned by an American multinational retailer. Walmart, approached the highest court after the Karnataka High Court last month rejected requests to quash the ICC investigation.

In a major setback in their efforts to block antitrust investigations, the court told the companies that, since they have denied all the allegations, “they should not hesitate to face an investigation.”

“The appeals are an attempt to ensure that the action initiated by the ICC (…) does not achieve the end,” said a panel composed of two judges, adding: “The appeals are without merit and deserve to be heard. ‘to be rejected’.

Days later, Flipkart asked the Supreme Court to challenge the High Court’s decision.

A report by the Reuters news agency cited a 700-page Flipkart file asking the highest court to prevent the ICC from seeking what the company called an “invasive” investigation.

As part of its investigation, the ICC asked Flipkart 32 “sensitive” questions, including a list of its best sellers, details of online discounts and deals with smartphone makers.

A day later, Amazon also filed an appeal; details of its filing were not made public.

Traditional retailers in India have often accused Flipkart of favoring certain sellers on its platforms to the detriment of other smaller businesses.

And a Reuters investigation of Amazon documents between 2012 and 2019 suggests it is granting similar preferential treatment to some sellers, and has also bypassed increasingly stringent foreign investment rules affecting e-commerce.

With the contribution of Reuters

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