The Competition Commission of India (CCI) has asked the Karnataka High Court to lift an interim stay on a case involving Amazon and Flipkart’s alleged preferential treatment of certain vendors. During a hearing, the CCI defended its designation of 13 vendors as ‘opposite parties.’ The court extended the stay, with the next hearing set for November 27, 2023.
Karnataka: The Competition Commission of India (CCI) has urged the Karnataka High Court to lift the interim stay it granted to a batch of alleged ‘preferred vendors’ of Amazon and Flipkart in the ongoing investigation into claims of preferential treatment by the e-commerce giants.
During a hearing on Wednesday, Additional Solicitor General N Venkataraman, representing the CCI, defended the Commission’s actions, stating that “due process and principles of natural justice” had been followed in arraying 13 vendors as ‘opposite parties’ in the case. Justice Hemant Chandangoudar presided over the hearing, which involved petitions filed by six of these alleged preferred vendors.
The case stems from a January 2022 CCI directive for an investigation into Amazon and Flipkart, accusing them of favoring specific vendors. Initially, the vendors were treated as third parties and were asked to cooperate with the probe. However, on August 28, 2023, the Director General (DG) issued an order changing their status to opposite parties, citing evidence of preferential treatment.
Senior Advocate KG Raghavan, representing one of the petitioner vendors, argued that this change violated Regulation 24 of the CCI (General) Regulations. He stated that the DG needed prior written permission from the CCI to alter a party’s status during an investigation. Raghavan also highlighted that the vendors had only been asked to cooperate as third parties in the probe for nearly four years.
Countering these arguments, Venkataraman contended that “the Act does not differentiate between a third party and an opposite party” and asserted that no regulations had been breached. He added that the vendors’ inclusion as opposite parties was justified as evidence emerged of their preferential treatment by the platforms, such as always appearing first in search results.
“This petition is their attempt to scuttle the entire investigation,”
he remarked.
Venkataraman also reminded the Court that Amazon and Flipkart had already challenged the investigation up to the Supreme Court, which ruled against them.
Justice Chandangoudar extended the interim relief granted to the petitioners, maintaining the stay on the CCI’s August 28 order. The Court will resume hearing the matter on November 27, 2023.
This case highlights the ongoing battle over allegations of preferential treatment in India’s booming e-commerce sector, with regulatory oversight increasingly scrutinizing the practices of industry giants. The CCI’s stance underscores its commitment to investigating alleged anti-competitive practices despite challenges posed by legal disputes.
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