Amazon, Walmart's Flipkart Violate India's Antitrust Laws, Investigators Allege: Report

An antitrust probe in India alleges that e-commerce giant Amazon.com, Inc. AMZN and Flipkart, which is owned by Walmart Inc. WMT, violated local competition laws by favoring specific sellers on their platforms.

Amazon and Flipkart are major players in India’s e-retail sector, which was valued between $57 billion and $60 billion in 2023, per Reuters.

According to consultancy firm Bain, this market is projected to exceed $160 billion by 2028.

In 2020, the Competition Commission of India (CCI) initiated an investigation into Amazon and Flipkart. The two companies favored specific sellers with whom they had business arrangements and prioritized certain listings on their platforms, the CCI alleges.

Last month, India's commerce minister criticized Amazon, claiming the company's investments were frequently used to offset its business losses, reported CNBC.

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The CCI reports span 1,027 pages for Amazon and 1,696 pages for Flipkart. The investigators concluded that the companies had developed systems that elevated preferred sellers in search results. As a result, other sellers were pushed out of visibility.

The reports are not public, Reuters added.

Amazon and Flipkart previously denied any misconduct and asserted that their practices comply with Indian regulations.

They will now examine the report and submit any objections before the CCI decides on possible fines.

The CCI initiated the probe following a complaint from the Delhi Vyapar Mahasangh, an affiliate of the Confederation of All India Traders (CAIT). Reuters reports that CAIT represents 80 million retailers across the country.

In the U.S., the Federal Trade Commission (FTC) has filed a lawsuit against Amazon, accusing the company of employing anticompetitive and unfair practices to unlawfully sustain its monopoly power.

Seattle-based Amazon countered that the FTC’s lawsuit could harm consumers by resulting in higher prices and slower delivery times.

Price Action: AMZN shares are trading marginally higher by 0.4% to $187.74 premarket at last check Friday.

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