High Court (India)

February 14, 2020

CCI Defends Amazon Probe Order Before Karnataka HC


[ By Bobby Anthony ]

Amazon-Flipkart

The lawyer for the Competition Commission of India (CCI) and the Delhi Vyapar Mahasangh (DVM) has defended the CCI order to initiate a probe against e-commerce firms including Amazon and Flipkart, before the Karnataka High Court.

It may be recalled that Amazon had moved the Karnataka High Court challenging the CCI’s probe order.

Earlier, the DVM had complianed that these players gave deep discounts on online sales of smartphones, as well as cherry-picked their sellers. In its petition, Amazon made CCI, DVM and Flipkart respondents.

CCI’s lawyer told the Karnataka High Court that it was the watchdog’s duty to ensure that there were no practices that had an adverse effect on competition.

However, arguing against the CCI order, Amazon’s counsel Gopal Subramanium had told the court that the CCI did not have prima facie evidence to order a probe into his client’s business practices.

The CCI’s lawyer objected to the jurisdiction point and said that writ petition filed under Article 226 of the Indian Constitution does not intervene in investigations of the CCI director general as directed by the CCI.

He quoted from the Consolidated FDI (foreign direct investment) Policy, 2017, saying that merely satisfying FDI norms did not exempt anyone from other laws of land.

Senior Counsel KG Raghavan, who appeared for DVM, argued that violations of FDI norms and competition law can be looked at by the respective authorities without the CCI having to wait for the investigation by the Enforcement Directorate (ED).

He said Amazon’s petition had no merit and needs to be rejected. Giving examples of how Amazon was promoting seller firms, where it owned a stake, Raghavan said that the relationship between Amazon and preferred sellers on its platform such as Cloudtail and Appario were like the “tentacles of the octopus” and “this has to be deciphered by the investigation”.

The CCI lawyer also referred various cases to state that a petition filed before the court under Section 226 of the Constitution cannot influence the order passed under Section 26 (1) of the Competition Act, which states that investigation