Amazon and Flipkart, on Friday, got a shot in the arm, with the Karnataka High Court staying the CCI (Competition Commission of India) probe against them for alleged violation of foreign direct investment (FDI) norms will have to wait as an investigation by the Enforcement Directorate (ED) into the allegation is already underway. The court said CCI will have to wait for ED’s report before proceeding with its probe.
While many experts have termed the order as an upper hand for Amazon and Flipkart, some have expressed their opinion that e-commerce players should try to adopt self-regulatory measures as an initial remedy to address areas of concern flagged by the commission. Brand expert Harish Bijoor dubbed the entire episode as the battle of big e- commerce versus small retailers.
Trade bodies such as the Confederation of All India Traders (CAIT) and Delhi Vyapar Mahasangh have decided to file an appeal against the order of the Karnataka High Court. CAIT will urge the Union government to speed up the ED investigation, and a CAIT delegation is expected to meet the Commerce Minister Piyush Goyal and Finance Minister Nirmala Sitharaman in this regard.
“The interim stay granted to Amazon by the Karnataka High Court against CCI investigations into anti-competitive practices by Amazon and Flipkart is unfortunate and unexpected. The lawyers representing Amazon tried their best to mislead the court by creating confusion between the ED and CCI investigation. Their main motive was to stop the CCI investigation, fearing exposure of their unethical business practices which would have become evident to the entire nation had the CCI probe been completed. We will now push the government to expedite the ED probe to expose the malpractices of these companies and will also file an appeal very soon in this matter,” said Praveen Khandelwal, CAIT national secretary general.
He further added that if Amazon was doing honest business and not indulging in any violation or unethical practice it was their moral responsibility to face the investigation and come clean. “By shying away from CCI investigation, Amazon has in fact created more doubts among it’s employees, stakeholders, authorities and the consumers,” remarked Khandelwal.
Many experts also reiterated that the e-commerce platforms should have clear and transparent polices. “E-commerce platforms should bring out clear and transparent policies on discounts to not hurt fair competition ethics. There must be legal control around the depth of exclusive arrangements and complete isolation of brick and mortar stores. A framework of collaboration with brick and mortar stores attracting multilateral benefits shall reap fair opportunity for the stakeholders, allowing everyone to participate in a democratised market and a market of equal opportunities,” remarked Rajiv M. Ranjan, a market expert and founder and CMD of PaisaDukan.com.
On the other hand, some experts have said there were a number of aspects that were simultaneously at play with regard to the CCI investigation, foremost among them is the ongoing confrontation between traditional channels and the e-commerce markets, particularly triggered by the mobile phone markets.
“Amazon's decision to take the matter to the court reflected their lack of confidence in the neutrality and objectivity of the CCI. Amazon's decision, in pursuing the matters with the court is also driven by, presumably, the fat that they have not indulged in unfair trade practice and the courts are a more neutral platform to seize upon Amazon's innocence on this subject,” Alok Shende of the Mumbai-based Ascentius Consulting told THE WEEK.
