Fair trade regulator Competition Commission of India (CCI), on Monday ordered a probe against Flipkart and Amazon for alleged malpractices, including deep discounting and tie-ups with preferred sellers.
The order follows a complaint filed by Delhi Vyapar Mahasangh, whose members comprise many traders.
"The Commission observes that the exclusive arrangements between smartphone/mobile phone brands and ecommerce platform/select sellers selling exclusively on either of the platforms, as demonstrated in the information, coupled with the allegation of linkages between these preferred sellers and OPs (opposite parties) alleged by the Informant merits an investigation," the Competition Commission of India said in an order.
It needs to be investigated whether the alleged exclusive arrangements, deep discounting, and preferential listing by the OPs are being used as an exclusionary tactic to foreclose competition and are resulting in an appreciable adverse effect on competition, it added.
Earlier this month, in a study conducted by the CCI, it was found that deep discounting on goods and services offered by large online retailers had emerged as a major concern, particularly in case of mobile phones. The fair trade regulator will probe all cases of possible abuse of market dominance.
Releasing the findings of the study and its own observations, the CCI said marketplace platforms need to adopt self-regulatory measures to address all areas of concern flagged in the study and also bring out clear and transparent policies on discounts.
The study, Market Study on Ecommerce in India, was initiated by the regulator in April 2019 with a view to better understand the functioning of ecommerce in India and its implications for markets and competition.
Also, the CCI has ordered an investigation against online travel agents MakeMyTrip and GoIbibo, and hospitality services provider OYO, after finding that prima-facie they have violated competition norms.
The CCI assessed the allegations based on two relevant markets. In the case of MakeMyTrip-GoIbibo (MMT-Go), it is the 'market for online intermediation services for booking of hotels in India', and for OYO, it is the 'market for franchising services for budget hotels in India'.
(Disclaimer: Additional background information has been added to this PTI copy for context)
Want to make your startup journey smooth? YS Education brings a comprehensive Funding and Startup Course. Learn from India's top investors and entrepreneurs. Click here to know more.