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Why Is CCI Probing Amazon and Flipkart? Allegations and Malpractices Explained

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The Supreme Court on Monday ordered the transfer of all petitions filed by Amazon and Flipkart, challenging the Competition Commission of India (CCI)’s probe into alleged malpractices, to the Karnataka High Court.

The decision consolidates multiple legal proceedings into a single jurisdiction for streamlined adjudication.

Unified Hearing in Karnataka High Court
A bench comprising Justice Abhay S. Oka and Justice Ujjal Bhuyan emphasized the importance of uniformity in handling the cases.

“It will be appropriate if all petitions, subject to this transfer petition, are heard by the Karnataka High Court,” the bench stated. The court also directed that if pleadings in some cases are incomplete, the Karnataka High Court judge handling the matter would allow reasonable time for their completion.

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Attorney General Highlights Proliferation of Pleas
During the hearing, Attorney General R. Venkataramani informed the court that five petitions related to the matter had been filed across different high courts since the CCI initiated its probe.

To prevent further fragmentation, the Supreme Court directed that any future petitions on the issue must also be transferred to the Karnataka High Court.

CCI Pushes for Consolidation of Cases
The CCI had earlier requested the apex court to transfer all related petitions from various high courts, including those in Allahabad, Madras, Telangana, Punjab and Haryana, Delhi, and Karnataka, to either the Supreme Court or the Delhi High Court. However, the Supreme Court opted to centralize the cases in the Karnataka High Court, ensuring a more localized yet unified resolution process.

Why Are Amazon and Flipkart Under Scrutiny?
The CCI launched its investigation in January 2020 following complaints from the Delhi Vyapar Mahasangh, a traders’ body representing smartphone and accessory sellers.

The allegations centered on practices such as deep discounting and preferential treatment of certain sellers on the platforms.

The probe intensified in April 2022 when the CCI conducted search-and-seizure operations on entities linked to Amazon and Flipkart, including major sellers like Cloudtail, Appario Retail, and Rocket Kommerce.

These raids uncovered electronic data, emails, and financial records, leading to further legal challenges.

Legal Challenges by E-Commerce Giants and Sellers
Amazon and Flipkart contested the CCI’s probe in various high courts, arguing against the regulator’s authority to investigate their business practices.

Sellers like Cloudtail and Appario Retail also filed petitions, claiming they were independent entities and not directly under the purview of the investigation.

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Despite cooperating with the investigation, some sellers alleged overreach by the CCI, particularly during the raids. Appario Retail, for instance, argued before the Karnataka High Court that the regulator had targeted third-party sellers without justification.

A Pivotal Moment for E-Commerce Regulation
This consolidated legal battle in the Karnataka High Court is expected to be a landmark case for India’s e-commerce sector, potentially reshaping regulatory practices and the operations of global giants like Amazon and Flipkart in the country.

With all eyes on the Karnataka High Court, the outcome of these proceedings could set a precedent for how India addresses anti-competitive practices in its rapidly growing digital economy.

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