The Competition Commission of India (CCI) has directed the Director General (DG) to conduct investigation into operation of e-commerce portal such as Amazon and Flipkart, in order to determine if they contravene Section 3(1) and Section 3(4) of the Competition Act, 2002 (CA,2002). Infact, under the Section 3(4) of the CA, 2002, CCI can gauge vertical agreements in light of rule of reason to assess whether exclusive arrangement, preferential listing by the e-commerce platforms and deep discount are exclusionary in the sense new participants cannot enter market or retard the competition in anyway.
The Order of January ,2020 of CCI in matter of Delhi Vyapar Mahasangh v. Flipkart Internet Private Limited & subsidiaries & Amazon Seller Services Private Limited & subsidiaries noted need for further investigation that would the business strategy of the e-commerce platforms can be termed as an attempt to hinder/retard the competition thereby having appreciable adverse effect on the competition or not under the parameter of CA,2002.
The CCI noted in its aforementioned order that as both the online platform are the main channel for the mobile phone distributors and any exclusive arrangement with the phone brands of these e-commerce platform shall warrant a further investigation. Also, it may be noteworthy that though there may be two e-commerce platforms in webspace and they may be competitors as they work in the similar manner of having exclusive tie-ups but still it prima facie would not suffice to conclude that existence of such platforms would depreciate the potential appreciable adverse effect on the competition.
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