The National Company Law Appellate Tribunal (NCLAT) ordered the Competition Commission of India (CCI) to start an investigation against Walmart-owned Flipkart for allegedly abusing its dominant position in the marketspace.
Justice S J Mukhopadhaya-led three-member bench set aside the last CCI ruling that had acquitted Flipkart and further directed it to consult its probe arm, Director General (DG), in order to start a probe against the e-commerce company.
“We set aside the order passed by CCI,” said the three-member bench. The regulator “is directed to initiate probe against Flipkart.” CCI should direct the Director General of its investigative unit to look into the allegations, the tribunal said.
The case was filed before the bench by All India Online Vendors Association (AIOVA). “We set aside the order passed by CCI… and the fair-trade regulator is directed to initiate probe against Flipkart,” said the bench.
AIOVA expressed its joy over the said order and stated that CCI order had innumerable lapses which they had put before NCLAT.
“CCI order had many lapses which we put in front of NCLAT,” an AIOVA spokesperson told ET. “We need to see the detailed order and also whether Flipkart has approached SC (Supreme Court) before any investigations happen.”
“We are delighted with today’s order. We are positive after the e-commerce study findings that CCI will penalize these platforms for violating various provisions of the Competition Act,” said Chanakya Basa, the counsel of AIOVA.
Earlier, on November 6, 2018, the CCI had held that the strategic approaches of Flipkart and Amazon are not infringing upon rivalry standards and dismissed charges of maltreatment of market strength made by AIOVA.
“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 the market,” CCI had ruled at that time.
AIOVA had asserted that Flipkart elements occupied with two particular organizations and manhandled predominance through Flipkart India Pvt Ltd, which is into discount exchanging/circulation of books, mobiles, PCs and related frill, and web-based business commercial centre Flipkart Internet Pvt Ltd.
The NCLAT administering comes as the Karnataka High Court has stayed an investigation by the CCI into Flipkart and Amazon over claims that the organizations had enjoyed anticompetitive practices. Legal experts said the NCLAT ruling could have implications for the situation as petitioner Amazon had widely cited the CCI's November 2018 order in which it got a clean chit from the commission.
The CCI had requested a test into Amazon Seller Services and Flipkart Internet, units of the two-web based business commercial centres, on January 13 in the wake of accepting objections from broker body Delhi Vyapar Mahasangh.
Author – Devansh Dev