Xiaomi Claims It Was Made Opposite Party in CCI Probe Without Consent

Smartphone maker Xiaomi has highlighted that they were made an opposite party in the recent CCI without their consent. The CCI was recently conducting an investigation against e-commerce platforms Amazon and Flipkart for anti-competitive practices. 

The smartphone maker mentioned that they were not given any notice or opportunity to be heard. As per the Economic Times, the company said in the RoC filing, “A non-confidential, heavily redacted version of the DG report has been shared with the company, and hence the exact nature of the allegations and the basis for the same, along with the evidence relied upon, are not clear.” 

The company also added that during the CCI investigation, information was sought from Xioami as a third party and not as an opposite party. However, the Director General of CCI’s report put it as an opposite party. “Unexpectedly, the DG report, without putting the company on notice or giving it an opportunity to be heard, has arrayed it as an opposite party,” the company reportedly said. 

The smartphone company has highlighted that it is in the process of reviewing the documents of the DG report and also the CCI order. Just to give some context, the CCI had reportedly mentioned in its investigation that both Amazon and Flipkart breached anti-trust laws in the country. A Reuters report says that the firms gave preference to certain sellers over others and treated other sellers as mere data bases.

Read: Amazon's Legal Woes: A Timeline of CCI's Investigation and Court Battles

Additionally, the investigation also highlighted that smartphone companies such as Xiaomi and Samsung colluded with the e-commerce platforms. These companies tied up to launch products exclusively on the e-commerce sites. 

G.V. Siva Prasad, the additional director of CCI, reportedly said, “Exclusivity in business is anathema. Not only is it against free and fair competition but also against the interest of consumers.” 

This case, which started in 2019, was stalled by the Karnataka High Court recently. The case proceeding was stalled due to a procedural error by the director general of CCI, adds an Economic Times report. The halt happened as the DG changed the stance of some sellers from “third party” to “opposite parties." 

This was done without seeking the approval from the commission, which is required by law. In an order, Justice Hemant Chandangoudar reportedly said, “The petitioners argue that this action by the DG is in violation of the established procedures and regulations, as the DG is required to obtain prior approval from the commission before altering the status of a party from a third party to an opposite party in the course of an investigation.” The court further highlighted that this lapse of procedure called for an investigation, and thus the report submitted by the DG should be considered void.