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AIOVA to appeal CCI’s Flipkart ruling regarding unfair and discriminatory pricing

The All India Online Vendor’s Association will appeal against the Competition Commission of India’s ruling favouring the Walmart-owned Flipkart, reports Reuters. AIOVA, which represents more than 3,500 online sellers, will appeal to the National Company Law Appelate Tribunal (NCLAT).

What the case was about

AIOVA had argued in November last year that Flipkart was using its dominant position to favour certain sellers through “unfair or discriminatory” pricing. The body said that it sells goods to companies like WS Retail, which then sells the products on Flipkart, alleging that this amounts of preferential treatment, and alleging that Flipkart has a direct conflict of interest with other retailers selling on their platform, and its own brands like ‘Smartbuy’ and ‘Billion’.

The CCI dismissed [pdf] the allegation that Flipkart was preventing the entry of other players, and reasoned that Flipkart cannot be giving preferential treatment to WS Retail, as it stopped being a seller on Flipkart from April 2017. The order states:

The Commission also observes that so far as the issue of preferential treatment given by [Flipkart India Pvt. Ltd.] to exclusive seller (WS Retail Services Private Limited) which is stated to be owned by [Flipkart Internet Pvt. Ltd.] , suffice to point out that the Informant itself has admitted in the Information of such structural link between [Flipkart Internet Pvt. Ltd.] and WS Retail existed only till 2012. Hence, no such concern is present today. Additionally, Flipkart has pointed out that WS Retail Services Pvt. Ltd. is no longer a seller on the Flipkart Marketplace post 11 April 2017.

The CCI had rejected the premise that Flipkart was a dominant player and ruled in its favour. It further added that Amazon had also not broken any rules. AIOVA had brought a similar case against Amazon, alleging that it favoured its merchants and sellers that it partly owned — Cloudtail and Appario.

The online sellers’ body had originally filed the petition in May 2018, alleging that Flipkart showed “preferential treatment and discriminatory conduct,” prohibited under the Competition Act. It also alleged that Flipkart was harming sellers who depended on its platform for their livelihood.

AIOVA has also opposed the Walmart acquisition of Flipkart, and petitioned to the CCI that Walmart would control the Indian company via a B2B model, which would affect sellers on Flipkart and may even lead to shutdown of their businesses.

CCI eye on Amazon-More deal

Last week, the CCI also sought details from Samara Capital, on whether the Samara-Amazon deal to jointly acquire the ‘More’ supermarkets from Aditya Birla Retail Ltd (ABRL) was compliant with the government’s revised FDI policy in e-commerce.

CCI’s queries to Samara Capital relates to its arm Witzig Advisory Services, which in October 2018, sought the CCI’s nod to acquire ABRL. Amazon India, in turn, had sought CCI approval to purchase a 49% minority stake in Witzig. The queries related to whether Amazon would be involved in More’s everyday operations, whether More would be integrated into Amazon India marketplaces, and how the deal would be compliant with the new FDI policy in e-commerce.

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