Indian Antitrust Probe Shouldn’t Treat Flipkart And Amazon In The Same Way, Says The Walmart Unit

Walmart’s Flipkart has recently argued with Indian anti-trust regulators that its case should not be treated as the same as its rival Amazon since the evidence against the two companies are “qualitatively different,” according to reports based on Flipkart argument in a court filing.

The Competition Commission of India (CCI) has been challenged by both Flipkart Amazon and in court with the intention of seeking a revocation order of an earlier order of an Indian court in June that allowed continuation of an antitrust probe against the two companies.

The United States based Amazon has been called arrogant by the Indian government and accused the company of legal routes to try and prevent the antitrust investigation.

The CCI and the court “confuse the facts” between the case of Amazon and Flipkart, and overlooked that they were “fierce competitors”, argued the Walmart unit in its final submissions made to a court in southern India’s Karnataka state.

Flipkart supported its arguments by saying that a business agreement that the CCI had examined prior to ordering the latest probe was only between Amazon and its sellers and the antitrust regulators had no such evidence against the Walmart unit.

“The allegations and the evidence before the CCI against the Appellant were qualitatively different from those relating to Amazon … The CCI should have independently examined the case against each of the two platforms,” Flipkart said in its 46-page submission, which was not public.

The Indian court is likely to pass a written order on the appeals in coming days.

Ono comments on the court proceedings were available from Flipkart and Amazon and the CCI.

Brick-and-mortar retailers in India have for years alleged that Amazon and Flipkart regularly circumvent Indian law by creating complex business structures. Such allegations have been denied by both the companies.

India’s Trade minister Piyush Goyal severely criticised US e-commerce giants last month for the companies filing legal challenges and while failing to comply with the CCI’s probe. “If they have nothing to hide … why don’t they respond to the CCI?” he said.

There were reports in the media in February based on internal company documents that showed that for years, Amazon had helped a small number of sellers to do more business on its e-commerce platform in India and used those small companies to bypass Indian foreign investment laws. There were also reports about Amazon indirectly holding equity stakes in two of its big online sellers, Cloudtail and Appario, and which are consequently given “subsidized fees” by the US e-retailer.

“Unlike in the case of Amazon,” Flipkart did not have any structural links of any kind between itself and its sellers, argued the Walmart unit in its submission to the court.

It said that Flipkart “ought to have been treated differently from Amazon.”

Amazon and Flipkart are leading players in an e-retail market India forecasts will be worth $200 billion by 2026.

(Adapted from BusinessWorld.in)

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