Karnataka HC stays CCI order against Amazon, Flipkart

‘Centre probing FEMA violation charge against e-com giants’

In a relief to e-commerce majors Amazon and Flipkart, the Karnataka High Court on Friday stayed the Competition Commission of India’s order directing an investigation through its Director General into whether they had entered into anti-competitive agreements in violation of the provisions of the Competition Act 2002.

Justice P.S. Dinesh Kumar passed the interim order while admitting a petition filed by Amazon Seller Services Pvt. Ltd., and stayed the January 13 order of the CCI. The CCI had ordered the probe on a complaint by Delhi Vyapar Mahasangh (DVM), which had alleged that Amazon and Flipkart were giving preference to select sellers and offering deep discounts by indulging in anti-competitive agreements.

Noting that the Foreign Direct Investment policy prohibits an investor from indulging in deep discounts, giving preference to sellers, etc., on online marketplace, and that the Centre had initiated a probe under FEMA to ascertain whether allegation of violation of conditions are true, the court said the complaint by DVM before too are on same issue.

The CCI, the court said, had not properly deliberated the issues to come to a conclusion that there exists a case to conduct an investigation as the CCI had concluded there was possibility of an exclusive partnership between smartphone makers and e-commerce platforms though the agreements cited in the complaint were between the online platforms and the sellers.

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