Indian regulators point out that Amazon and Flipkart are violating antitrust laws by favoring smartphone makers such as Samsung and Xiaomi
Indian regulators have published the results of an investigation into the hugely popular online shopping platforms in India, Amazon and Flipkart, which have allegedly been giving preferential treatment to products from smartphone makers such as Samsung and Xiaomi.
Exclusive: Amazon, Walmart's Flipkart breached India antitrust laws, investigation finds | Reuters
Exclusive: India accuses Samsung, Xiaomi of colluding with Amazon, Flipkart | Reuters
https://www.reuters.com/world/india/india-accuses-samsung-xiaomi-colluding-with-amazon-flipkart-2024-09-14/
India lawmaker, trade group seek suspension of Amazon, Flipkart operations after antitrust breaches | Reuters
https://www.reuters.com/business/retail-consumer/india-lawmaker-trade-group-seek-suspension-amazon-flipkart-operations-after-2024-09-13/
Amazon and Flipkart violated competition laws in India, report says | TechCrunch
https://techcrunch.com/2024/09/12/amazon-and-flipkart-violated-competition-laws-in-india-report-says/
CCI finds Samsung, Xiaomi colluding with Amazon, Flipkart: Report | India News - Business Standard
https://www.business-standard.com/india-news/cci-finds-samsung-xiaomi-colluding-with-amazon-flipkart-report-124091400401_1.html
For years, small Indian retailers have criticized the rise of large companies, claiming that they have been hurt by the rise of large companies, arguing that 'if they sell products on online shopping platforms, they are forced to offer significant discounts.' According to estimates by consulting firm Bain, the size of India's online shopping market is expected to reach $57 billion to $60 billion (approximately 8 trillion to 8.4 trillion yen) in 2023 and exceed $160 billion (approximately 22.5 trillion yen) by 2028.
In 2020, the Competition Commission of India (CCI) launched an investigation into Amazon and Flipkart , an Indian e-commerce service, for allegedly promoting certain sellers with whom they have business agreements and giving preferential treatment to certain products. The CCI investigation was triggered by a complaint by an affiliate of the Confederation of All India Traders (CAIT), India's largest trade association, which represents 80 million retailers.
Subsequently, on August 9, 2024, the CCI released a 1,027-page report on Amazon and a 1,696-page report on Flipkart. The reports revealed that Amazon and Flipkart have established a system that displays products listed by certain sellers at the top of search results, creating an unfavorable environment for other sellers. The reports state that 'all the alleged anti-competitive conducts have been investigated and found to be substantiated.'
According to a CCI report on Amazon, Amazon's preferred sellers are designed to 'dominate the listings' so that when customers search for a product, 'customer attention is drawn to the listings.'
'Preferred sellers receive various preferential services, including marketing and delivery, at a 'nominal cost'. In particular, Flipkart has provided preferential treatment to preferred sellers by allowing them to sell mobile phones at significantly discounted prices, which amounts to 'predatory pricing' and eliminates competition,' the CCI's report on Flipkart said.
In the CCI report on Amazon, the preferred sellers were smartphone manufacturers such as Samsung, Xiaomi, Motorola, Realme, and OnePlus. In the report on Flipkart, the preferred sellers were six companies: Samsung, Xiaomi, Motorola, Vivo, Lenovo, and Realme. According to research firm Counterpoint, Samsung and Xiaomi are the largest smartphone manufacturers in India, each with a market share of about 36%. Vivo is the third largest in the Indian market, with a market share of 19%.
While Amazon and Flipkart have been accused of heavily discounting mobile phones, among other things, the report said: 'Anti-competitive behaviour is not limited to the sale of mobile phones. It is pervasive in other product categories as well.'
The report has prompted Indian politicians and major retail associations to call for a ban on Amazon and Flipkart. Pravin Khandelwal, a member of Indian Prime Minister Narendra Modi's Bharatiya Janata Party, told Reuters he would meet with Commerce Minister Piyush Goyal soon to ask for an 'immediate suspension' of the e-commerce companies' operations in India.
The CCI will consider challenges to the findings from Amazon, Flipkart, retailer associations and smartphone makers in the coming weeks and may require the companies to change their business practices and impose fines, the people said.
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