The Supreme Court on Monday rejected a plea filed by e-commerce majors Amazon and Flipkart that sought to stall an antitrust investigation into their business practices. The top court stated that the two companies must face inquiry by the Competition Commission of India (CCI) for anti-competition agreements.
“As big e-commerce organisations you should volunteer for antitrust investigation but you are objecting,” said chief justice of India (CJI) NV Ramana-led bench.
Previously, the Karnataka high court had dismissed the petition challenging CCI probe for alleged anti-competitive practices. Later, Amazon and Flipkart challenged the high court decision, which was dismissed by the SC today.
The CCI last year ordered an inquiry after allegations from brick-and-mortar retailers that the US firms promoted select sellers on their e-commerce platforms and used to business practices that stifle competition.
The companies deny any wrongdoing and have repeatedly tried to mount legal challenges against the probe.
The CCI investigation is a major setback for Amazon and Flipkart, which are grappling with prospects of tougher e-commerce regulations and accusations from brick-and-mortar retailers that the companies circumvent Indian law by creating complex business structures.
The companies face several allegations in the case, including exclusive launches of mobile phones, promotion of select sellers on their websites and deep discounting practices that drive out competition.
Last month, commerce minister Piyush Goyal had lashed out at US e-commerce giants for filing legal challenges and failing to comply with the CCI’s investigation.
Amazon is facing another CCI challenge, with the watchdog accusing the company of concealing facts and making false submissions when it sought approval for a 2019 deal with an Indian company.