Why antitrust body CCI has moved Supreme Court against Amazon, Flipkart

The CCI has moved the Supreme Court to expedite the resolution of 24 court cases pending against Amazon and Flipkart, asserting that they were intended to derail its probe

The Competition Commission of India (CCI) recently filed a transfer petition in the Supreme Court, seeking to consolidate all 24 cases pending across various High Courts against Amazon and Flipkart, according to a report by Reuters.

 

The antitrust regulator claims these lawsuits, initiated by e-commerce platforms and their sellers in various states’ High Courts, aim to stall its investigation into alleged anti-competitive practices by the e-commerce giants.

Why is CCI probing Amazon and Flipkart?

The CCI is a statutory body tasked with enforcing competition law and ensuring a fair and competitive marketplace in India. It first launched its investigation against Amazon and Flipkart in January 2020 on a complaint filed by Delhi Vyapar Mahasangh, a traders’ association, alleging that Amazon and Flipkart preferred select sellers to boost their products’ visibility.

   

According to a report in Moneycontrol, the traders' panel alleged that these sellers were closely linked to these e-commerce platforms.

 

However, litigation by the e-commerce platforms initially paused the probe. Subsequent cases filed by affiliated sellers across multiple High Courts including Karnataka, Delhi and Telangana have further delayed progress, with the CCI highlighting that four years have passed without a conclusive order.

Search and seizure powers under scrutiny

In April 2022, the CCI conducted search and seizure operations on several large sellers, such as Cloudtail and Appario Retail, retrieving electronic data including financial records and emails.

 

Amid legal tussle, a key legal question centres on whether the CCI can raid and seize data from third-party sellers linked to the e-commerce platforms under scrutiny. Sellers argue that these operations violated legal protocols, asserting they were unrelated third parties and not directly under investigation.

 

Appario Retail, for instance, raised concerns over “gross violation of mandatory legal precedents” in its challenge before the Karnataka High Court.

What did CCI find in its probe?

In August 2024, the CCI concluded that Amazon and Flipkart violated antitrust laws by favouring selected sellers on their platforms. The investigation found that both companies elevated certain sellers in search results, disadvantaging others.

 

Additionally, smartphone manufacturers like Samsung and Vivo were implicated for collaborating with these e-commerce giants to launch products exclusively online, further breaching competition regulations.

 

Following this, numerous legal challenges were filed across various high courts by vendors and companies such as Samsung and Vivo, aiming to obstruct the CCI's investigation.

 

In response to these petitions, the CCI has moved the Supreme Court to expedite the resolution of these 24 challenges, asserting that they were intended to derail the probe.