‘Flipkart deal: FDI violation may merit scrutiny, not in CCI ambit’

Having cleared global retail giant Walmart’s $16 billion acquisition of homegrown Flipkart, fair trade watchdog CCI has opined that complaints about the deal violating FDI rules ‘may merit policy intervention’ but do not fall under its ambit.

The Competition Commission also observed that the complaint about Flipkart’s discounting practice or preference to select e-tailers is not specific to this merger deal and is ‘already prevalent’ in the market.

It also made it clear that there is no bar on the regulator to examine these issues under relevant provisions of the Competition Act about anti-competitive agreements and abuse of dominance.

The deal has triggered opposition from several quarters including traders’ lobby groups and the Swadeshi Jagaran Manch and several of them had submitted their complaints to the CCI, which was approached in May for approval of the acquisition.

In its order clearing the deal, the CCI has said it is ‘not likely’ to have an appreciable adverse effect on competition in India.

‘Beyond scope of Act’

“Issues falling beyond the scope of the (Competition) Act cannot be a subject matter of examination by the Commission, though they may merit policy intervention,” it said.

Noting that as per the foreign direct investment (FDI) policy an e-commerce platform cannot influence market prices directly or indirectly, the regulator said this was a matter of consideration for the ‘appropriate regulatory/enforcement authority.’

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Printable version | Oct 22, 2020 3:42:57 PM |

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