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Karnataka High Court dismisses Amazon and Flipkart pleas against CCI Probe

Karnataka High Court dismisses Amazon and Flipkart pleas against CCI Probe

A single bench of Justice PS Dinesh Kumar in the Karnataka High Court dismissed the writ petitions filed by e-commerce giants Amazon and Flipkart challenging an order passed by the Competition Commission of India (CCI), citing the limitations of the power of judicial review under Article 226 of the Constitution to interfere with a probe ordered by an expert specialized body.

The Court in its judgement said, “it would be unwise to prejudge the issues raised by the petitioners in these writ petitions at this stage and scuttle the investigation.”

In January, 2020, the order was passed by CCI, under Section 26(1) of the Competition Act, directing the Director General to investigate into the allegations against Amazon and Flipkart. The order came on a complaint filed by Delhi Vyapar Mahasangh (an organisation of retailers), who alleged that Amazon and Flipkart were giving preferential treatment to a select set of vendors by having indirect control on their operations. The Sangh alleged that the e-commerce companies were abusing their competitive position.

Senior Advocate Gopal Subramanian, appearing for Amazon, intimidated the Court that there was no jurisdictional fact enabling CCI to issue the order. Senior Advocates Uday Holla and Dhyan Chinnapa, appearing for Flipkart, argued that the anti-trust body's prima facie views are not supported by any evidence or materials. 

They also highlighted that no agreement which has adverse effect on competition, has been placed on record. The petitioners also argued that they were not served any notice by the CCI before passing the order.

Additional Solicitor General Madhavi Divan, defending the CCI, submitted that the order was passed only as a direction for investigation and hence the challenge was premature. As regards the petitioners' reliance on the order passed in the All-India Online Vendors Association’s (AIOVA) case, the ASG also said that the concept of res judicata was not applicable with respect to orders passed under Section 26(1).

The Court observed that the order showed that the Commission has looked into the information in detail.

The Court in the judgement said, “In a writ petition filed under Article 226 of the Constitution of India, seeking judicial review, the High Court can examine only the decision-making process with the exception namely the cases involving violation of fundamental human rights. The law on the point is fairly well settled.”

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