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In 2019, an investigation was conducted based on a complaint filed by the Delhi Trade Union: lakhs of traders had to close their businesses due to such policies of both the companies.
In the four-year-old case involving Amazon and Flipkart, the investigation by the Director General of Investigation of the Competition Commission of India (CCI) has revealed that both the e-commerce giants violated anti-trust laws. This information was given by sources related to this incident. According to sources, the report of this investigation will soon be given by CCI to the complainant and the two companies involved in this case and after that the case will be heard.
No notice has been given to both the companies regarding this matter yet. The matter was complained by Delhi Trade Union in 2019. The complaint alleges that both companies engaged in anti-competitive practices that caused millions of union members to go out of business. The companies were given the opportunity to select merchants who were suitable and profitable to sell on their platform and were offering huge discounts on smart phone sales. Prices of certain products were kept below the minimum to avoid any other business competition from the companies and special partnership agreements were also made for manufacturers to sell goods only to these companies. After receiving the complaint in 2019, CCI ordered an investigation under Section 26-1 of the Competition Act, 2002 on January 13, 2020.
It is alleged that what kind of irregularities have been committed by both the foreign e-commerce companies.
The prices of some products were kept below the minimum level so that no other business could compete with the companies.
Special partnership agreements were also made under which manufacturers sold goods only to these companies.
This opportunity was provided by both companies by selecting merchants who were suitable and profitable to sell on their platforms.
Huge discount given in smartphone sale
Due to this type of anti-competitive policy, lakhs of traders in Delhi had to close their business.
Monopoly in mobile sales through exclusive launch
After a complaint was filed by the Delhi Chamber of Commerce in 2019, the CCI had ordered a probe into the matter in early 2020. But when no action was taken even after four years of ordering the investigation, finally the national level organization had to make a representation before the CCI to reduce the case. In this submission it was said that policies like exclusive launch are being used by these two foreign companies to maintain monopoly in the sale of mobile phones. The submission also said that some of the companies were formed for the sole purpose of mirroring the mobile sales that Flipkart and Amazon had.