Amazon, Flipkart give preferential treatment to Samsung and Xiaomi: CCI
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The Competition Commission of India (CCI) report claimed that major smartphone manufacturers, including Samsung and Xiaomi, along with e-commerce giants Amazon and Flipkart, were involved in exclusively launching products on the e-commerce firms’ platforms, breaching antitrust laws in India, Reuters reported.
According to reports from the Competition Commission of India (CCI), these companies engaged in anti-competitive practices that hurt market competition and disadvantaged other businesses.
The CCI's investigations found that Amazon and Flipkart provided preferential treatment to select sellers and prioritised certain product listings while offering steep discounts on products. This conduct allegedly undermined fair competition and adversely affected other companies in the market.
The 1,027-page report on Amazon and the 1,696-page report on Flipkart highlighted that these e-commerce platforms engaged in exclusive product launches with several smartphone manufacturers. The investigation uncovered that Samsung, Xiaomi, Motorola, Realme, and OnePlus had colluded with these platforms to release products exclusively on their websites, in violation of competition laws.
The reports, which were dated August 9 and are not yet public, also suggest that Amazon and Flipkart downplayed the allegations of exclusive launches during the investigations, although officials found the practice widespread. The inclusion of leading smartphone manufacturers in the antitrust case could intensify their legal and compliance challenges.
Both Amazon and Flipkart, along with the implicated smartphone companies, have not yet responded to the findings. The CCI's reports, as revealed by Reuters, reflect a broader trend of increasing scrutiny over e-commerce practices in India. The investigation was initiated in 2020 following a complaint from the Confederation of All India Traders, which represents millions of small retailers who have long accused these companies of harming their businesses through unfair practices.
The findings of the CCI's investigation could have substantial repercussions. The Commission is expected to review any objections to its conclusions and may impose fines or mandate changes in business practices. The allegations include the misuse of foreign investments by Amazon and Flipkart to offer subsidised rates for warehousing and marketing to select sellers.
With India’s e-retail market projected to exceed $160 billion by 2028, the outcome of these investigations is likely to have a significant impact on the industry. The rise in online sales, which saw a sharp increase from 14.5% in 2013 to 50% last year, underscores the growing importance of this market and the need for regulatory oversight to ensure fair competition.