Competition Commission of India (CCI) has accused Samsung, Xiaomi and other smartphone companies of colluding with Amazon and Walmart’s Flipkart. CCI says that these companies collaborated with e-commerce sites to launch exclusive products on their sites, which is a violation of anti-competition laws. According to a report by news agency Reuters, CCI found in its investigation that Amazon and Flipkart gave preference to certain sellers, priority to some listings and huge discounts, which harmed other companies, which is a violation of local law.
CCI calls exclusive selling dangerous
In a 1027-page report prepared on Amazon, CCI said that the Indian units of five companies – Samsung, Xiaomi, Motorola, Realme and OnePlus – launched exclusive phones in collaboration with Amazon and its affiliates, which is a violation of competition laws. In the case of Flipkart, CCI said in a 1696-page report that the Indian units of Samsung, Xiaomi, Motorola, Vivo, Lenovo and Realme launched exclusive phones. CCI Additional Director General GV Shiva Prasad has written in these reports dated August 9 that exclusive sales are not only against free and fair competition but also against the interests of consumers. CCI also said that both of them used foreign investment to provide services like warehousing and marketing to selected sellers at cheap rates.
Where did the matter start from?
The investigation into Amazon, Flipkart and their sellers began in 2020 following a complaint by an 80 million-member body affiliated with the Confederation of All India Traders, the country’s largest retailer association. Indian retailers have repeatedly accused Amazon and Flipkart, as well as smartphone companies, of not providing retailers with the latest models, hurting their business. Indian research firm Datum Intelligence estimates that 50% of phone sales were online last year, up from 14.5% in 2013. Flipkart is projected to have a 55% share of online phone sales in 2023, and Amazon 35%.
Now, on the basis of its reports, CCI has ordered some smartphone companies – Xiaomi, Samsung, OnePlus, Realme and Motorola to submit their financial statements for three financial years till 2024, which should be certified by auditors. This order has been given on August 28. According to the information, CCI will review any objections of Amazon, Flipkart, Retailer Association and smartphone companies on its report in the coming weeks, after which penalty can be imposed. Also, companies can be asked to change their business practices. The e-retail market in India is growing rapidly and according to the estimates of consultancy firm Bain, it is expected to cross $ 16 billion by the year 2028, which was at $ 5700-6000 crore in 2023.
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