Breather for Flipkart as Supreme Court stays order for CCI probe over alleged abuse of dominant position

• The Supreme Court stayed a National Company Law Appellate Tribunal (NCLAT) order that made way for a probe against the e-commerce giant for alleged abuse of dominant position.
• The Chief Justice of India Sharad Arvind Bobde-led bench has sought a reply from the Competition Commission of India (CCI).
• The NCLAT order from March had allowed the CCI to launch a probe against the e-commerce giant.

Some relief came in for Indian e-commerce giant Flipkart as the Supreme Court stayed a National Company Law Appellate Tribunal (NCLAT) order that made way for a probe against the e-commerce giant for alleged abuse of dominant position.

According to Bar & Bench, the Chief Justice of India Sharad Arvind Bobde-led bench has sought a reply from the Competition Commission of India (CCI).

During the court proceedings on December 2, 2020, Senior Advocate Harish Salve representing Flipkart said that Amazon being a competitor, is not a dominant player, which means that predatory pricing doesn’t apply to Flipkart as well. He said, “predatory pricing is an issue to be considered against the dominant player as a case of abuse of power but his client has not been held as a dominant player.”

Salve added that the “CCI didn’t look at the findings of the Government and instead relied on the tax department findings, thus misread the findings of the tax tribunal.”

The NCLAT order from March had allowed the CCI to launch a probe against the e-commerce giant. The order was based on the allegations made by All India Online Vendors’ Association (AIOVA).

The Indian e-commerce giant has often come under scrutiny, along with its US-based rival Amazon, for predatory pricing, deep discounts and more, from India’s various trade associations. An e-commerce policy from the Indian government is still in the works to regulate India’s booming e-commerce sector.

The case so far: Flipkart vs AIOVA

The AIOVA had moved the CCI in March 2018 and stated that “that small vendors have become allies of the big vendors and suppliers to leading sellers such as Cloudtail, WS Retail etc. on the Flipkart and Amazon platforms, rather than selling directly to consumers through the online e-commerce marketplace sites.”

CCI had then absolved Flipkart of any such allegations. “...looking at the present market construct and structure of online marketplace platforms market in India, it does not appear that any one player in the market is commanding any dominant position at this stage of evolution of the market,” the order had said then.

Following the plea to CCI, the AIOVA had moved the NCLAT in January 2019.