Supreme Court Refuses To Stop CCI Probe Against Amazon & Flipkart Under Competition Act

Srishti Ojha

9 Aug 2021 12:18 PM IST

"We expect big organizations like Amazon and Flipkart to voluntarily go for enquiry and you don't want even that?", CJI said.

In a setback to e-commerce giants Flipkart and Amazon,the Supreme Court on Friday refused to halt the preliminary enquiry ordered by the Competition Commission of India (CCI) into their alleged anti-competitive practices.A bench comprising Chief Justice of India NV Ramana, Justices Vineet Saran and Surya Kant refused to interfere with the orders of the Karnataka High Court which refused...

A bench comprising Chief Justice of India NV Ramana, Justices Vineet Saran and Surya Kant refused to interfere with the orders of the Karnataka High Court which refused to interfere with the preliminary enquiry ordered by the Competition Commission of India (CCI) into their alleged anti-competitive practices.

The bench said that the CCI enquiry must go on. However, the bench accepted the request made on behalf of the companies for extending the time for reply to CCI.

"We see no reason to interfere in order. Seeing that time granted is expiring on 9 August, we extend it by 4 weeks", the bench said.

"We expect big organizations like Amazon and Flipkart to voluntarily go for enquiry and you don't want even that? You have to submit and enquiry has to be permitted", CJI Ramana orally remarked during the hearing.

Senior Advocate Gopal Subramanium, representing Amazon, submitted that existence of two facts are necessary for a CCI probe - one, an anti-competitive agreement; two, adverse effect on competition. In this case, the existence of these two facts have not been established, he argued.

He contended that the CCI ordered the enquiry without any application of mind. Dr. Singhvi, appearing for Flipkart, also raised similar arguments.

The CCI was represented by Solicitor General of India Tushar Mehta, Additional Solicitor General Madhavi Divan,briefed by the team from Samvad Partners led by Partners Arjun Krishnan and Harish Narasappa, Senior Associates Ankur Singh and Suhaas Shenoy and Associate Shourya Bari.

The impugned order was passed by the CCI in January 2020 under Section 26(1) of the Competition Act directing the Director General to investigate into the allegations against Amazon and Flipkart. The order came on a complaint filed by Delhi Vyapar Mahasangh (an organization of retailers) who alleged that Amazon and Flipkart were giving preferential treatment to a select set of vendors by having indirect control on their operations, especially the launch of smartphones. The DVM alleged that the e-commerce companies were abusing their competitive position.

The CCI, finding prima facie merit in the complaint, a probe into the practices of Amazon and Flipkart like discounting practices, exclusive tie-ups and private labels.

Both the companies moved the Karnataka High Court challenging the CCI order.

On June 11, a single bench of Justice PS Dinesh Kumar dismissed the writ petitions filed by Amazon and Flipkart against the CCI order, saying, "it would be unwise to prejudge the issues raised by the petitioners in these writ petitions at this stage and scuttle the investigation". The single bench judgment was upheld by a division bench comprising Justice Satishchandra Sharma and Justice Nataraj Rangaswamy observing "in the concerned opinion of this court by no stretch of imagination the inquiry can be crushed at this stage. If the appellants are not involved in violation of any provisions of the Act of 2002 they should not feel shy in facing inquiry by CCI."

(Cases : Flipkart Internet Private Ltd vs Competition Commission of India- SLP(c) No.11558/2021, Amazon Seller Services Private Ltd vs Competition Commission of India-SLP(c) No.11615/2021).

Click Here To Read/ Download The Order

Supreme Court Refuses To Stop CCI Probe Against Amazon & Flipkart Under Competition Act

Srishti Ojha

"We expect big organizations like Amazon and Flipkart to voluntarily go for enquiry and you don't want even that?", CJI said.

Tags