April 23, 2015: The Informant before Competition Commission of India (“CCI”) alleged that the e-portals/e-commerce websites and product sellers enter into ‘exclusive agreements’ to sell the selected product exclusively on the selected portal to the exclusion of other e-portals or physical channels or through any other physical channel. Accordingly, the portal operator decides terms of re-sale, sale price, terms of payments, delivery period, quality and service standards etc. All of these conditions are non-negotiable for a consumer who intends to buy those products. Further, to create hype for the product, the supply is controlled by the e-portal with whom the exclusive arrangement has been made, creating an impression of scarcity. For analysing allegations pertaining to the contravention of section 3 (4) read with section 3(1) of the Competition Act (Act), it is necessary to first establish the existence of an agreement/arrangement. Once the agreement is proved, the next enquiry is into the effects of such agreement/arrangement; the test being AAEC as per the factors laid down under section 19(3) of the Act. Though the Opposite Party’s have denied exclusive arrangements, accepting that such exclusive arrangement did in fact exist, the important question is whether such arrangements/agreements are anti-competitive. Section 3(1) of the Act unequivocally condemns only such agreement/arrangement/understanding which has or is likely to have an AAEC in the market. Section 3(3) of the Act presumes AAEC in case of certain horizontal agreements/arrangements which have been specifically identified therein.
Vertical agreements/arrangements under section 3(4) and other agreements/arrangements which do not fall under section 3(3) are anti-competitive only when AAEC is proved. Therefore, the Commission has to consider various factors laid down under section 19(3) of the Act such as:
a) creation of barriers to new entrants in the market;
b) driving existing competitors out of the market;
c) foreclosure of competition by hindering entry into the market;
d) accrual of benefits to consumers;
e) improvements in production or distribution of goods or provision of services; and
f) promotion of technical, scientific and economic development by means of production or distribution of goods or provision of services to assess the effect of such exclusive arrangement between manufacturers and e-portals.
November 6, 2018: The CCI had held that the business practices of Flipkart and Amazon are not in violation of competition norms and rejected allegations of abuse of market dominance made byAll India Online Vendor’s Association (AIOVA). The All India Online Vendor’s Association decided to appeal against the Competition Commission of India’s ruling favouring the Walmart-owned Flipkart. AIOVA, which represents more than 3,500 online sellers, decided to appeal to the National Company Law Appellate Tribunal (NCLAT). AIOVA had also opposed the Walmart acquisition of Flipkart and petitioned to the CCI that Walmart would control the Indian company via a B2B model, which would affect sellers on Flipkart and may even lead to the shutdown of their businesses.
January 13, 2020: The Commission observed exclusive arrangement between smartphones/mobile phones brand and e-commerce platforms. The CCI observed it is a matter of investigation whether the exclusive arrangement, deep discounting and preferential listing is a matter of exclusionary tactics to foreclose competition.
February 15, 2020: An Indian antitrust investigation of Amazon.com Inc and Walmart’s Flipkart was put on hold by a court. Amazon challenged the investigation in a court in Bengaluru and the court granted a stay of two months then. The Competition Commission of India (CCI) last month ordered a probe into Amazon and Flipkart over alleged violations of competition law and certain discounting practices. The CCI ordered its probe after a New Delhi-based trader group complained that the e-commerce giants were promoting select sellers and in turn hurting business for other smaller players. Amazon and Flipkart have faced mounting criticism from Indian retailers which accuse them of violating local laws by racking up billions of dollars of losses to fund deep discounts and discriminating against small sellers.
February 21, 2020: AIOVA had alleged that Flipkart entities engaged in two distinct businesses and abused dominance through Flipkart India Pvt Ltd, which is into wholesale trading/distribution of books, mobiles, computers and related accessories, and e-commerce marketplace Flipkart Internet Pvt Ltd.
The National Company Law Appellate Tribunal (NCLAT) has ordered the Competition Commission of India (CCI) to initiate a probe against Walmart-owned Flipkart for alleged abuse of its dominant position in the market. The Justice S J Mukhopadhaya-led three-member bench set aside the last CCI ruling that had absolved Flipkart and directed the CCI, Director General (DG), to initiate a probe against the e-comm company.
Like Flipkart is a respondent in Amazon’s filling, Amazon is a respondent in Flipkart’s filing. In January, the antitrust regulator ordered a probe into the practices of the two e-commerce companies, stating that discounting practices, exclusive tie-ups, private labels are anti-competitive. The probe was ordered after a New Delhi-based trader group complained that the online retailers were promoters.
February 28, 2020: The National Company Law Appellate Tribunal (NCLAT) has dismissed an order of the dedicated bankruptcy court initiating insolvency proceedings against e-commerce major Flipkart. A three-member bench of the NCLAT has directed the interim resolution professional (IRP) appointed by the Bengaluru bench of the National Company Law Tribunal (NCLT) to hand over the records as well as the assets of the company back to its promoter immediately. Cloudwalker Streaming Technologies Pvt Ltd, an operational creditor of Flipkart that used to supply the e-commerce major imported LED TVs, had filed a petition before NCLT contending that Flipkart defaulted for an amount of Rupees 26.95 crore.
March 9, 2020: Following the National Company Law Appellate Tribunal (NCLAT) order last week to begin a probe into Flipkart for abuse of its dominant position, the All India Online Vendors Association (AIOVA) has filed a caveat in the Supreme Court against the Walmart-owned e-tailer. The move by AIOVA, the group representing small e-vendors, comes in anticipation of Flipkart challenging the NCLAT order in the SC. has reviewed the filing.
March 12, 2020: The National Company Law Appellate Tribunal (NCLAT) on dismissed a petition filed by traders’ body CAIT against CCI nod to Walmart’s USD 16-billion acquisition of Flipkart. A two-member bench of the appellate tribunal headed by Justice S J Mukhopadhaya said CAIT failed to establish its allegations against CCI granting approval for Walmart-Flipkart deal.
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