India’s competition watchdog is probing deals between Amazon, Flipkart and their preferred sellers

• The Competition Commission of India (CCI) is investigating deals between e-commerce platforms and preferred sellers.
• The competition watchdog had last month conducted raids on offices of online vendors.
• The investigators have reportedly found documents that reveal “financial linkages” between e-commerce platforms and online vendors.

E-commerce giants Amazon India and Flipkart have come under the scanner of the Competition Commission of India (CCI) once again. The investigative arm of the competition watchdog is currently investigating documents that have revealed financial dealings between e-commerce platforms and their preferred sellers.

According to an Economic Times report, the investigative arm, which is currently reviewing the documents found during a raid last month, has sought more time from the CCI. The raids were conducted on the offices of Amazon and Flipkart’s sellers.

The investigation was supposed to be completed in the first week of June. However, additional time has been sought to analyze data.

“Some important data has been seized during the raids and the same needs to be analyzed,” a source familiar with the investigation told ET.

According to a source, the investigators recovered documents pertaining to “financial linkages” between the e-commerce platforms and sellers on the platforms. The documents reportedly also contain data related to costs.

“Deep discounting is a key antitrust issue that CCI is probing and the documents pertaining to the acquisition costs of the goods will provide more insights on who is subsidizing these goods,” added the source.

One of the issues being probed by the watchdog is the equity held by e-commerce giants in these online vendors.

“Also, since some of the ecommerce companies themselves own shares in the online vendors, CCI is examining the terms of such equity investments,” the source said.

The Confederation of All India Traders (CAIT), a trader’s body, has welcomed the investigation and the raids conducted on the online vendors. CAIT has been a vocal critic of e-commerce platforms and the deep discounts offered by them.

The CAIT in 2020 had approached CCI, alleging abuse of market dominance by e-commerce platforms. In its petition, CAIT had claimed that the e-commerce platforms were forcing vendors to become preferred vendors and then promoting them over non-preferred vendors.
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