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Probe finds Amazon, Walmart's Flipkart breach competition laws in India
The e-commerce giants Amazon and Flipkart were engaged in anti-competitive practices by favouring select sellers on their platforms, according to the probe conducted by the Competition Commission of India (CCI).
Rather than a move away, experts foresee a recalibration of expectations, with clients seeking more transparency and agencies responding with stronger governance and accountability from media buying agencies, after the CCI probe into ad firms.
The U.S. e-commerce giant Amazon and Walmart's backed Flipkart have been found to have violated local competition laws by giving preference to select sellers on their shopping websites, according to the Indian antitrust investigation.
In 2020, the Competition Commission of India (CCI) ordered an investigation into Amazon and Flipkart for allegedly promoting certain sellers with which they had business arrangements and giving priority to certain listings.
According to confidential reports seen by Reuters, a 1027-page report on Amazon and a separate 1,696-page report on Flipkart- both dated August 9, the CCI investigators said the companies were found to have created an ecosystem where preferred sellers appeared higher in search results, elbowing out other sellers.
The two companies will now review the report and file any objections before CCI staff decide on any potential fines.
The investigation was triggered by a complaint from Delhi Vyapar Mahasangh, a group of brick-and-mortar retailers.
It is to be noted that e-commerce giants including Amazon and Flipkart both have en facing criticism for their business practices in India from smaller retailers.
Recently, Piyush Goyal, India's Minister of Commerce and Industry has questioned Amazon's predatory pricing strategy which is a risk for smaller retailers. Referring to the company's Rs. 6000 crore loss in India, he said, “If you make Rs 6,000 crore loss in one year, does that not smell like predatory pricing to any of you?”
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