India ordered a large-scale investigation into Flipkart and Amazon India on Monday after a retail trade group alleged that the e-commerce giants were indulging in anti-competitive practices to gain foothold in the country.
The Competition Commission of India (CCI), the local antitrust body, noted four concerns including the arrangements between smartphone vendors and e-commerce platforms to sell certain handsets exclusively online, as well as e-commerce firms giving preferential treatment to certain sellers and said these allegations merit an investigation.
The CCI will also investigate whether Amazon India and Walmart offer deep discounting on their marketplaces and promote their own private labels.
The investigation is the latest setback for Amazon and Walmart’s Flipkart, which Indian brick-and-mortar traders allege violate the country’s foreign investment rules. Delhi Vyapar Mahasangh, which represents micro and small traders, made the allegations.
We have reached out to Amazon India and Flipkart for comment.
The decision to investigate Amazon India and Flipkart would add to the headache of both the e-commerce firms that faced a major regulatory hurdle last year. The direction comes days before Amazon chief executive officer Jeff Bezos is expected to kickstart an event focused on small businesses in New Delhi.