Flipkart, Amazon not flouting rules in selecting merchants: CCI

The Competition Commission of India (CCI) said in a ruling late on Tuesday that Flipkart and Amazon were not flouting any rules in their selection of merchants that sell on their platform.

The All India Online Vendors Vendors Association (AIOVA) sees the ruling in favour of the e-commerce giants as a defeat. AIOVA, which represents more than 3,500 online sellers, had complained that Flipkart was biased in its selection of vendors. It had also alleged that Flipkart was flouting a section of anti-trust laws that disallow “unfair or discriminatory” pricing in India.

In its ruling, the commission said:

“Looking at the present market construct and structure of online marketplace platforms market in India, it does not appear that any one player in the market is commanding any dominant position at this stage of evolution of market.”

AIOVA has also brought a similar case against Amazon, which owns Cloudtail, its distribution partner. Chanakya Basa, a lawyer for AIOVA, says that they would appeal the judgement in a higher court.

“By their own admission, Flipkart claims they are the dominant player,” he added.

Flipkart and Amazon have always maintained they adhere to every law in India.

According to consulting firm EY, the retail market in India is worth $650 billion, of which organised retail makes up only 10 percent. Online retail’s share of this pie is only going to increase with more than 300 million smartphones being used in the country.

India is estimated to have almost 500 million people using broadband internet as of 2018. The organised market in retailing, according to various estimates can be as high as $100 million in five years as consumption continues to rise. By then, organised retailing could well form 20 percent of a large consumer market that is forecast to be worth $1 trillion.

[Also read: Ecommerce companies clocked $2.3 billion in just 5 days of festive sales]