Supreme Court Indicates Transfer Of Amazon, Flipkart Sellers' Petitions Against CCI Probe To Karnataka HC; Stays HC Proceedings Until Jan 6

A bench of Justice Abhay Oka and Justice Manmohan issued notice returnable on January 6 and stayed the proceedings in the petitions before the Karnataka HC in the meantime.

“Notices are made returnable on 6th of January. In the meanwhile, the writ petitions which are being heard by Karnataka High Court which are subject matter of this petition shall not proceed. Prima facie we are of the view that all cases pending in various High Courts could be transferred to Karnataka High Court for hearing”, the Court stated in the order.

The Court was hearing CCI's plea to transfer 24 writ petitions filed in various High Courts by sellers associated with Amazon and Flipkart, challenging a probe by the CCI into alleged anti-competitive practices.

The Court had earlier observed that the CCI could not be granted special treatment to bypass the Karnataka High Court Rules by transferring the cases directly to a division bench instead of the single judge bench. The Court also expressed its disinclination to transfer the petitions to the Delhi High Court.

The Court had directed Attorney General for India R. Venkatramani to take instructions on whether the CCI agrees to transfer all cases to the Karnataka High Court single judge bench, where some of the cases are already pending.

Today, the AGI said that the CCI had no objection to the cases being heard by the Karnataka High Court. However, he requested uniformity and a timeline for hearings, noting that additional petitions had been filed, bringing the total to 26.

Justice Oka highlighted the necessity of ensuring that all petitioners before the various High Courts were parties to the current proceedings, enabling the Court to pass a transfer order.

The Court permitted the CCI to add necessary parties and directed it to file an amended cause title within two days. Notices were made returnable on January 6, 2025.

Justice Oka emphasized that CCI could not receive preferential treatment bypassing the Karnataka High Court Rules, which mandate that cases be first decided by a single judge. Justice Oka stated that the Supreme Court cannot bypass established procedures to place matters directly before the division bench.

The CCI initiated the probe in January 2020 under Section 26(1) of the Competition Act, 2002, following a complaint by the Delhi Vyapar Mahasangh, a traders' association. The complaint alleged that Amazon and Flipkart gave preferential treatment to select sellers, boosting their visibility and disadvantaging others. The association also claimed that these preferred sellers were closely linked to the platforms.

In June 2021, a single judge of the Karnataka High Court dismissed writ petitions filed by Amazon and Flipkart challenging the probe. Justice PS Dinesh Kumar observed that halting the investigation at the preliminary stage would be unwise. This judgment was later upheld by a division bench of the High Court, which noted that if the companies were not involved in any violation of the law, they should not avoid the inquiry. Subsequently, in August 2021, the Supreme Court also refused to interfere with the CCI's preliminary investigation.

In August 2024, the CCI concluded its investigation, finding that Amazon and Flipkart had violated competition laws by favoring select sellers and launching exclusive online products in collaboration with smartphone manufacturers such as Samsung and Vivo.

Amazon and Flipkart associated sellers have filed petitions in Karnataka, Punjab and Haryana, Delhi, Madras, Allahabad and Telangana High Courts challenging different aspects of the CCI's investigation. The CCI, through its transfer petition in the Supreme Court, has sought to consolidate these cases to prevent multiplicity of proceedings and delays.

Attorney General for India, R. Venkatramani, recently mentioned the transfer pleas before the Supreme Court stating that they need to be heard before December 17, as the Karnataka High Court is scheduled to hear related petitions filed by Amazon and its sellers. Chief Justice of India, Sanjiv Khanna, confirmed that the matter has already been listed for hearing.