CCI India Finds Amazon & Flipkart Guilty of Breaking Antitrust Rules

• An investigation led by the Competition Commission of India (CCI) revealed that Flipkart and Amazon have been colluding with renowned smartphone brands like Samsung and Xiaomi and breaking local competition laws.
• These e-commerce companies have exclusivity deals with the mobile makers under which some of the products are only launched on their websites and nowhere else.
• The CCI is yet to give a final verdict on this case - both fines and mandatory changes are being considered.

India has accused Samsung, Xiaomi, and other smartphone companies of colluding with Amazon and Flipkart and breaching the country's antitrust rules.

An investigation by the Competition Commission of India (CCI) revealed that 5 smartphone companies had an exclusivity deal with Amazon and Flipkart under which they would only launch certain products on the Indian websites of these e-commerce giants.

• In Amazon's 1027-page report, the 5 companies were revealed to be Samsung, Xiaomi, Motorola, Realme, and OnePlus.
• In Flipkart's 1696-page report, the 5 companies were Samsung, Xiaomi, Motorola, Vivo, Lenovo and Realme.

None of the involved parties have responded to our request for comment. However, the CCI revealed that both Flipkart and Amazon tried to downplay the extent of this exclusivity. But as investigations revealed, it was quite rampant.

Exclusivity in business is anathema. Not only is it against free and fair competition but also against the interest of consumers.' - CCI's additional director general G.V. Siva Prasad

In addition to this, both Amazon and Flipkart have also been accused of being partial to certain sellers or listings by prioritizing them and giving unrealistic discounts that made it harder for their rivals to compete.

This investigation was triggered in 2020 by a complaint filed by the Confederation of All India Traders - India's biggest retailer association.

What Happens Now?

The investigation is far from over. Some of the smartphone companies such as Xiaomi, Samsung, OnePlus, Realme, and Motorola have been asked to submit their financial statements for the three fiscal years leading to 2024, which should be certified by their auditors.

Meanwhile, the CCI is open to any objections that the smartphone companies or Amazon and Flipkart might raise in response to these findings. After resolving those objections (if any), the agency will impose fines or ask the companies to correct their practices. Nothing definite has been decided as of now.

Amazon and Flipkart's actions have severely impacted both other online platforms and offline stores in India. These businesses got the latest models of smartphones at a much later date. By that time, a huge chunk of customers have already made their purchase from Amazon or Flipkart.

Research from Datum Intelligence shows that 50% of the phone sales last year came from online platforms. Out of all the units shipped, 55% were sold by Flipkart and 35% by Amazon.

The ecommerce industry is growing at a rapid pace in India. From $57 billion in 2023, it is expected to grow to $160 billion in 2028. So it's only fair that every player in the industry gets a fair chance. This way customers will also have a fair shot at deciding where they buy from.

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