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K'taka HC junks Amazon, Flipkart plea against CCI probe
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SME Times News Bureau | 23 Jul, 2021
The Karnataka High Court on Friday dismissed a plea by Amazon and
Flipkart against a probe initiated by the Competition Commission of
India (CCI) for the alleged violation of competition
A division
bench comprising justices Satish Chandra Sharma and Natraj Rangaswamy
passed the order on a batch of appeals moved by the e-commerce companies
challenging a June 11 order passed by a single judge of the high court.
The high court bench noted that by no stretch of imagination
the inquiry can be quashed at this stage and the appellants shouldn't be
afraid of investigation by CCI. The bench said: "In the considered
opinion of the court, appeals filed by appellants are devoid of merit
and deserved to be dismissed..."
Amazon had moved Karnataka High
Court against the CCI order which had called for a director general
(DG)-level investigation into allegations of anti-competitive conduct in
the online sale of smartphones on its platform.
Delhi Vyapar
Mahasangh (DVM), the informant before the CCI, had alleged predatory
pricing, deep discounting, preferential seller listing, and exclusive
partnerships, among others, against Amazon and Flipkart.
The high court had reserved the judgment on the matter on June 25.
Justice
P.S. Dinesh Kumar, on June 11, had dismissed the petitions filed by
Amazon and Flipkart. DVM comprises traders from many micro, small and
medium enterprises, and rely on trade of smartphones and related
accessories.
Additional Solicitor General (ASG) Madhavi Divan,
representing the CCI, contended that due to search bias on the
respective platforms, they are pushing up certain sellers and the
visibility for all sellers is supposed to be the same.
She
emphasized that the essence of the competition act is to eliminate
anti-competition elements, and "if there is nothing to hide, then there
is no reason to scuttle the investigation".
During the hearing,
it was argued that since Amazon and Flipkart favour certain sellers,
they are active participants in the process. Amazon, on the other hand,
submitted that its algorithm is dictated by consumers and preferential
listing is based upon the reflection of the consumers.
Counsel
for Flipkart had argued that the anti-trust body's prima facie views are
not supported by any evidence and no agreement, which has adverse
effect on competition, has been placed on record.
Counsel
appearing for DVM submitted that Amazon in its writ petition has
mentioned there are agreements which they sign with smartphone
manufacturers, which shows they have an understanding with the sellers.
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