The Karnataka High Court has dismissed the appeal of E-commerce companies Amazon and Flipkart to halt the antitrust investigation by India’s competition watchdog against their operation.
The verdict came after both companies, Walmart owned by Flipkart and Amazon, had appealed separately to the division bench of Karnataka high court against its previous order, the way for CCI (Competitive Commission of India) to investigate both companies.
“In the concerned opinion of this court by no stretch of the imagination the inquiry can be crushed at this stage,” a division bench of Justices Satish Chandra Sharma and Nataraj Rangaswamy ruled.
The bench held that the appeals filed by Amazon and Flipkart were devoid of merits and substance. “If the appellants are not involved in violation of any provisions of the Competition Act of 2002, they should not feel shy in facing an inquiry by CCI,” the Karnataka High Court said.
In January last year, CCI had ordered a probe following a complaint filed by bodies such as Delhi Vyapar Mahasangh (DVM) group of MSME (Micro, Small and Medium Enterprises) and Confederation of all India Traders (CAIT). Saying that “prima facie” evidence to start an investigation is sufficient against both companies under section 26 (1) of the competition act 2002.
As per Delhi Vyapar Mahasangh and Confederation of all India Traders, Amazon and Flipkart had certain agreements with a group of select preferred sellers. It gives these sellers unfair preferential treatment over others.