The judgement allows CCI to continue its investigation against the two marketplaces under Section 3 of the Competition Act which deals with anti-competitive agreements.
The judgement which was pronounced by Justice PS Dinesh Kumar, single judge, Karnataka High Court allows CCI to continue its investigation against the two marketplaces under Section 3 of the Competition Act which deals with anti-competitive agreements.
However, even as that happened, let’s take a look at some of the key arguments acknowledged by the court as per the 51-page long order:
— Gopal Subramanium, senior advocate appearing for Amazon had submitted that the Competition Act was to foster the competition in the country. An online market place, in fact, promotes competition and cannot be treated as anticompetitive, unless, there is clear and cogent evidence to that effect.
— Udaya Holla and Dhyan Chinnappa, senior advocates appearing for Flipkart said that if a seller chooses to sell exclusively on Flipkart’s market place, it is his/her prerogative and Flipkart cannot be held responsible.
— The Competition Commission of India stated that the informant has alleged that petitioners have entered into vertical agreements with ‘preferred sellers’ which has led to foreclosure of ‘nonpreferred sellers’ from the online marketplaces.
— The commission also argued that exclusive agreements and deep discounting raise potential competition concern, as an e-commerce platform with market power can thwart competition by entering into exclusive contracts.
— It also said that the commission was not the only anti-trust regulator which has initiated enquiry against Amazon. European Commission, in July 2019 had also initiated formal investigation against Amazon on the aspect of collection of competition sensitive data of sellers on the market place and its potential misuse.
In its judgement, the court said that it would be unwise to prejudge the issues raised by the petitioners in these writ petitions at this stage and scuttle the investigation.
Therefore, the impugned order did not call for any interference.