The Competition Commission of India (CCI) has accused Samsung and Xiaomi of collaborating with e-commerce giants Amazon and Flipkart and launching their products exclusively on these sites. This arrangement is in violation of the antitrust laws in India.
This was first reported by Reuters. The CCI recently conducted an investigation on Amazon and Flipkart where the watchdog found that the e-commerce giants had violated the competition law of the country. Both Flipkart and Amazon were engaged in activities such as giving preference to certain sellers, providing very high discounts, prioritising certain products, and others, as per Reuters.
G.V. Siva Prasad, the additional director general of CCI, reportedly mentioned that exclusivity in any business is against free and fair competition and it also acts against the interests of consumers.
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While the investigation started in 2020 after a complaint by a Delhi-based traders association, Amazon and Flipkart tried to delay the same by filing several appeals. Eventually, the Supreme Court of India rejected the appeals of both Amazon and Flipkart on August 9, 2021. Following this, the CCI continued with its probe.
The CCI, in its investigation, reportedly mentioned, "Each of the anti-competitive practices alleged... were investigated and found to be true." Further, the watchdog mentioned that for the e-commerce companies, ordinary sellers were like mere data bases.
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In its detailed 1,027-page report on Amazon, the CCI highlighted that the practice of exclusively launching their phones on the e-commerce platform was followed by companies including Samsung, Xiaomi, Motorola, Realme and OnePlus, adds the Reuters report.
With regard to Flipkart, companies that once again tied up for exclusive launches of their products on the e-commerce platform include Samsung, Xiaomi, Motorola, Vivo, Lenovo and Realme. The reports seen by Reuters also mentions that this practice of exclusive launches had a severe impact on ordinary sellers. Additionally, it also impacted retail stores in India.
What the Competition Law Says in India
The Competition Act of 2002 aims to protect the Indian market from anti-competitive practices. "The Act prohibits any agreement which causes, or is likely to cause, an appreciable adverse effect on competition in markets in India. Any such agreement is void,” as per the CCI.
Similarly, Section 3 of the Act covers vertical agreements between enterprises at different production or distribution stages. These include tie-in arrangements, exclusive supply or distribution deals, refusal to deal, and resale price maintenance. The commission mentions that while reasonable conditions to protect intellectual property rights (IPR) are usually permitted, the watchdog makes regular checks to make sure they are fair and needed.
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Additionally, in terms of abuse of dominant position, the commission says “imposing unfair conditions or prices, including predatory pricing; limiting production/market or technical or scientific development; denying market access” are examples of abuse of dominant position.
