Complaint filed against Flipkart for hiring former CCI member while under antitrust probe

Corporate governance advisory firm InGovern Research Services has filed a complaint with the Finance Ministry and the Competition Commission of India (CCI) raising concerns about Flipkart hiring a former CCI member while the antitrust regulator is probing the company.

In March 2023, Flipkart hired Anku Sharma, a former key member of the CCI team responsible for investigating Flipkart, as an Antitrust – Subject Matter Expert. This is a breach of trust and raises “substantial doubts about the impartiality of CCI’s investigations, posing a potential threat to its integrity,” InGovern claimed in a press release sent to us on October 6.

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InGovern has demanded a fresh investigation into Flipkart.

“There is a high probability that the investigation by CCI may have been compromised during the period Mr Sharma was part of the investigation team at the CCI. The entire chain of events is highly suspicious, something that casts a cloud of doubt over the impartiality of the investigation, and therefore, the entire findings of the CCI during Mr Sharma’s tenure should be deemed compromised,” InGovern said in its complaint.

We have reached out to Flipkart for a response and will update this post once we receive it.

“While the Act (The Competition Act, 2002) itself does not explicitly define a ‘cooling-off’ period for its members before joining entities they previously regulated, any perceived conflict of interest can trigger calls for scrutiny. Given the allegations raised by InGovern Research Services, it is likely that both the Finance Ministry and the CCI will delve into the matter to determine the legitimacy of the hiring and its implications on past investigations,” Sonam Chandwani, Managing Partner at KS Legal and Associates, told MediaNama.

What is the CCI investigating: The CCI initiated a probe into Amazon and Flipkart in January 2020 to investigate four alleged antitrust violations:

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1. Exclusive launch of mobile phones
2. Promoting preferred sellers on their websites
3. Deep discounting practices
4. Prioritising some seller listings over others

The probe was initiated following a complaint filed by the Delhi Vyapar Mahasangh (DVM), a group of MSME (Micro, Small and Medium Enterprises) smartphone traders.

The investigation, however, was immediately put on hold due to legal challenges by Amazon and Flipkart. In August 2021, CCI finally received the green light to proceed with the probe after the Supreme Court dismissed pleas by Amazon and Flipkart to stop the investigation.