India’s antitrust body on Monday ordered an investigation into alleged competition law violations by Amazon.com Inc and Walmart’s Flipkart, the latest setback for U.S.-based e-commerce giants operating in the country.
The Competition Commission of India (CCI) said it was ordering a wider probe following a review of allegations that Amazon and Flipkart were promoting some “preferred sellers” and in turn hitting business of other smaller sellers.
However, the two companies did not immediately respond to a request for comment on the antitrust move.
Report says the investigation order comes in a week when Amazon chief Jeff Bezos is expected to visit India for a company event and potential meetings with government officials.
The complaint against the two giant companies was filed by Delhi Vyapar Mahasangh, a group representing small- and medium-sized businesses.
The group alleged that several of Amazon and Flipkart’s preferred sellers were affiliated with or controlled by the companies themselves, either directly or indirectly.
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“The CCI also wants its investigations arm to probe the e-commerce companies’ discounting practices as well as their relationship with such sellers.
“The Commission is of the opinion that there exists a prima facie case which requires an investigation,” it said.
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 and burn billions of dollars to offer steep discounts that hurt smaller traders.
However, both the companies denied those allegations.
(Reuters/NAN)
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