Flipkart Faces Monopoly Heat as SC Seeks Regulatory Balance

The Supreme Court of India has reportedly said that e-commerce major Flipkart was known for creating monopolies, while expressing concern about the survival of smaller players in the market. The probe pertains to Flipkart’s alleged use of its dominant position, prompting the bench to inform the company’s counsel that it would like to examine the issue of monopoly.

A bench of Justices Surya Kant and N Kotiswar Singh appointed an amicus curiae to assist it in the adjudication of the dispute arising out of an National Company Law Appellate Tribunal (NCLAT) order asking the fair trade regulator Competition Commission of India (CCI) to initiate probe against Flipkart for an alleged use of its dominant position.

“We want big players to come and invest here but at the same time, we are worried about the dragon’s mouth…it is a serious issue and we have to keep the interest of consumers and small players in mind. Some balancing authority is needed,” the bench said as quoted by PTI.

Justice Kant said sometimes Flipkart also offered so much discount that it disrupted the business of small players and the balance of the market. “It has passed the order, good or bad. It’s job is over. Why should the authority be here in a case? Tomorrow, we can’t ask the high court to be here in every case,” he added.

Flipkart Under CCI Lens

In 2020, the CCI had launched an investigation to examine alleged anti-competitive practices by Amazon and Flipkart such as favoring select e-retailers, hampering competition in India’s e-commerce market. The CCI investigation found that the e-commerce giants violated antitrust laws by colluding with certain e-retailers and smartphone manufacturers for exclusive online launches, thus restricting market access.

Retailers affiliated with Amazon and Flipkart filed multiple petitions in various high courts, opposing the CCI’s conclusion. These petitions pointed to the faulty procedure of the investigation and questioned the credibility of its findings. In response, CCI asserted that filing multiple petitions are just tactics to derail the probe and avoid accountability for anti-competitive practices.

Foreign-owned ecommerce giants like Amazon and Flipkart are violating restrictions on foreign ownership in the retail sector by indirectly controlling e-retailers on their platforms. The ED claimed that the e-commerce platforms bypassed the rules by exercising indirect control over their preferred e-retailers.