Highlights
- CCI accused Samsung and Xiaomi of unfair trade practices.
- The commission also put e-commerce companies Amazon and Flipkart under scrutiny.
- These findings could significantly impact Amazon and Flipkart’s market position
Amazon and Flipkart may Face scrutiny over alleged seller favouritism. (Image credit – Gizmochina)
“Exclusivity in business is anathema. Not only is it against free and fair competition but also against the interest of consumers,” CCI’s additional director general GV Siva Prasad wrote in the Amazon and Flipkart reports, in identical findings.
The Competition Commission of India (CCI) has accused major smartphone brands such as Samsung and Xiaomi of involving in unfair trade practices and violating antitrust laws in the country. E-commerce giants Amazon and Flipkart along with Samsung and Xiaomi have been facing similar charges for a while now.
According to regulatory reports revealed by Reuters, the investigation revealed that Amazon and Flipkart were involved in such practices.
These included organising exclusive product launches, providing deep discounts, and giving preferential treatment to select sellers. It also included other companies like Motorola, Realme, OnePlus, Vivo, and Lenovo.
The CCI have submitted a 1027-page long report on Amazon and a 1696-page report on Flipkart, detailing all charges.
The report also suggests that these exclusive partnerships harmed competition. They are particularly unfair to traditional brick-and-mortar retailers.
Amazon and Flipkart allegedly provided benefits like subsidized warehousing and marketing to favoured sellers. This changed the market share unfairly and may have increased prices for consumers.
These findings come as a major blow to Amazon and Flipkart.
Both e-commerce companies have dominated India’s booming e-commerce market for over a decade now. They are expected to hit $160 billion by 2028. Experts now believe that such accusations, losing consumer trust and facing penalties could definitely hurt their market position.
As for smartphone brands, the situation is equally troubling. Brands in question such as Samsung and Xiaomi together have almost 36% of the Indian market share. They also are likely to face scrutiny for their involvement.
The CCI has further requested financial statements from the implicated companies. All this is a part of a deeper investigation.
This is not the first time such accusations have come in the spotlight. This issue was first raised back in 2020 when the Confederation of All India Traders filed a complaint.
They accused e-commerce platforms of sidelining small retailers. According to the then accusations, the giant e-commerce companies deliberately block small retailers during new phone launches.
Many experts believe that CCI’s next steps could likely include imposing fines. It could also push for possible changes to business practices. If this happens, it will be setting a precedent for future regulation in India’s smartphone and e-commerce industries
FAQs
What are the main accusations against Samsung and Xiaomi by the CCI?
The CCI has accused Samsung and Xiaomi of unfair trade practices and violating antitrust laws in India.
How did Amazon and Flipkart allegedly harm competition?
Answer. Amazon and Flipkart allegedly organized exclusive product launches, provided deep discounts, and gave preferential treatment to select sellers, which harmed competition and traditional retailers.
What could be the potential impact of these findings on Amazon and Flipkart?
These findings could hurt Amazon and Flipkart’s market position, lead to fines, and push for changes in their business practices.
What is the problem which has resulted in the accusation against Flipkart & Amazon ?
Retailers in India have accused Amazon, Flipkart, and smartphone companies of exclusive phone launches online, stating that traditional retailers suffered because they didn’t have access to the latest models.
Online phone sales have seen a significant increase, with Flipkart and Amazon holding the majority share in the market.
What could be the result of the accusation against Flipkart & Amazon ?
The investigation is a setback for Amazon and Flipkart in a time of growth .
This is due to their conflicts with small retailers for impacting their offline businesses.
It was reported that both companies used their foreign investments to offer subsidised rates for services like warehousing and marketing to a select group of sellers.
The investigation started from a complaint filed by an affiliate of the Confederation of All India Traders, the country’s largest retailer association.
The CCI will review the feedback on this from Amazon, Flipkart, the retailer association, and the smartphone companies in the coming weeks and could potentially impose fines and mandate changes to their business practices.
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