India has ordered an investigation of both Amazon and Walmart, regarding alleged violations of competition law in the latest setback for US e-commerce giants operating in India, where the Indian Competition Commission (CCI) said it is ordering a broader investigation after reviewing allegations that Amazon and Flipkart are promoting some ” Preferred Sellers “and thus harm the business of other smaller sellers, according to the Indian gadgetsnow site.
Senior Vice President Rajnesh Kumar said that Flipkart is “fully compliant” with all laws and is currently reviewing the decision of the Indian Competition Commission CCI, while Amazon has not responded to a request for immediate comment, and Amazon President Jeff Bezos is expected to visit India for possible meetings with government officials this week .
It is reported that the complaint was filed against the two companies by Delhi Vyapar Mahasangh, a group representing SMEs, and they claimed that many of the preferred sellers from Amazon and Flipkart were affiliated with or controlled by the companies themselves, either directly or indirectly.
In a 11-page report, the Indian CCI observed four alleged anti-competitive practices: exclusive launch of mobile phones by e-commerce companies, encouragement of preferred sellers on their websites, deep discount practices and prioritization of some seller lists over others.
The request states: “The exclusive launch (of mobile phones) coupled with the preferential treatment of a small number of vendors and discount practices creates an ecosystem that may have a measurable negative impact on competition,” and the commission said its investigative unit should complete the investigation within 60 days, But these cases took longer time.
While in 2018 Walmart invested up to $ 16 billion to buy a majority stake in Indias Flipkart, which is the largest deal ever, in what would be the move by the Indian committee is the latest setback for US companies that were hit last year with stricter rules for foreign investment.
It is reported that in a recent study, CCI said that India was the fastest growing e-commerce market with revenue expected this year to reach $ 120 billion, three times its size in 2017, and “the e-commerce sector suffers from many issues, i.e. Negative by. “