It is better to conduct an investigation: ASG Divan on CCI probe in Amazon probe

Additional Solicitor General Madhavi Divan appearing for Competition Commission of India said that Amazon’s argument is that if an investigation is conducted, it will affect its reputation, Bar and Bench reported.

“But look at the reports. It is better to conduct an investigation and put the matter to rest rather than nipping it in the bud,” Divan said.

Karnataka High Court is hearing two petitions moved by Amazon and Flipkart seeking to quash the probe ordered by the Competition Commission of India (CCI) against them for alleged violations of Competition Law.

“Why do names of only some sellers come up in search lists? Why the other names don’t come up?,” Divan asked.

After Amazon, even Flipkart has resorted to having preferred sellers, she added. “Our 26 (1) order suggests that there are preferred sellers,” she said.

Divan said Amazon has been charged with Antitrust violations by the EU. Investigations are going on in the UK and Germany against Amazon. Indian e-commerce market is as big as 33 billion (refers to a report by NASSCOM). Flipkart and Amazon have 33 per cent and 56 per cent shares for mobile phones in the market.

Ultimately, a shop owner has to buy a mobile for the same price as an end consumer. How will he make a profit, she argued.

“Also, why would a brand want to sell their product only in one platform? Why that exclusivity?” Divan talked on exclusive agreements between Amazon, Flipkart and Smartphone brands, as per Bar and Bench.

Flipkart launched over 60 smartphones in one year and Amazon, 44 phones, said Divan reading from a report.

The report also speaks of exclusive agreements (exclusive tie-ups), deep discounting, and preferred sellers.

Divan read from the order passed by the CCI under 26 (1) and why CCI thinks that a fact-finding process by the DG is essential.

Divan said this order meets the threshold under section 26 (1) and no further reasons are required to be made under the order. She will complete her arguments on Tuesday.