Karnataka HC clears path for CCI probe against Amazon, Flipkart

More than a year after the Karnataka High Court granted a stay on the investigation by Competition Commission of India (CCI) against ecommerce majors Amazon and Flipkart, the court on Friday dismissed the pleas filed by both the companies. This clears the path for a CCI investigation initiated in January 2020 against the companies for flouting Foreign Direct Investment (FDI) guidelines and violating competition laws. 

“We will review the judgement carefully and decide on the next steps,” an Amazon spokesperson said in response to queries from TechCircle on whether the ecommerce firm will approach Supreme Court. 

Flipkart did not respond to queries till the time of publishing this article. 

CCI had ordered a probe into the operations of the ecommerce companies based on a complaint submitted by Delhi Vyapar Mahasangh which said that the platforms indulged in preferential listing, deep discounting and promotion of private labels. Following this, Amazon filed a writ petition with the Karnataka High Court in February 2020 seeking a stay on the probe, followed by a similar petition filed by Flipkart. 

The court granted the companies interim relief later that month stating that since FDI violations came under the purview of Enforcement Directorate, where an investigation against the ecommerce players is pending, the decision would be taken based on the report. 

CCI approached the Supreme Court with a plea to vacate the Karnataka High Court stay on its investigation. The Supreme Court dismissed the plea in September 2020, directing the High Court to decide on the matter within six weeks.  

“We appeal CCI to continue its probe and also urge Piyush Goyal to bring (out) new press note without delay,” said Praveen Khandelwal, secretary general of traders’ body, Confederation of All India Traders (CAIT). He was referring to revised press note on FDI guidelines to be issued by the Department for Promotion of Industry and Internal Trade (DPIIT) under the ministry of commerce.  

DPIIT has previously issued three press notes in this regard.