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CCI tells Karnataka HC that it is well within its rights to probe Amazon, Flipkart

Saransh Pandey

Intern
  • March 18, 2021
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    The government had directed the ED and the RBI to take action against Amazon and Flipkart last year.

The Competition Commission of India (CCI) told Karnataka High Court that it is willing to close the matter following a report by the director-general, but it is well within its rights to conduct an inquiry. It added that even as there are matters pertaining to Amazon and Flipkart being heard in other jurisdictions, it doesn't stop the CCI from making its enquiry.

Madhavi Divan, Additional Solicitor General (ASG), appearing for the CCI, before Justice PS Dinesh Kumar said that according to the DG's report the growth of the market, the fast-moving nature of the market, one has to act quickly. They may even close the case.

The submission was made during the hearing of the challenge to the CCI order which sought an investigation into alleged anti-competitive practices by Amazon and Flipkart last year.

According to Madhavi Divan the Foreign Exchange Management Act and the Competition Act follow different procedures and standards. Under FEMA it is a much more stringent regime in terms of hearing, show cause notice, etc and the standard of adjudication is also much more onerous and stringent. 

Last year, following complaints from the Confederation of All India Traders for violation of the FDI policy and the Foreign Exchange Management Act (FEMA), the government directed the Enforcement Directorate and the Reserve Bank of India to take necessary action against Amazon and Walmart-owned-Flipkart.

While appearing for Amazon, Senior Advocate Gopal Subramanium had said the CCI's probe into Amazon is a violation of the Competition Act. Both Amazon and Flipkart have made submissions challenging the CCI's orders. The development comes as the government is working on a policy for the e-commerce sector. The first copy of the draft has already created a lot of murmur in the ecosystem with leading companies calling it unfavorable.

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