Setback for Amazon, Flipkart as Karnataka HC dismisses plea against CCI probe

In a setback for online retailers Amazon and Flipkart, the Karnataka High Court on Friday upheld a single-judge  order dismissing the pleas filed by the two companies challenging a probe initiated by the Competition Commission of India (CCI) for alleged competition law violations. A division bench of Justices Satish Chandra Sharma and Natraj Rangaswamy passed the order in a batch of appeals moved by the e-commerce giants against a June 11 order of a single-judge of the high court.

The bench dismissed the plea saying that the inquiry cannot be quashed at an early stage. "Appellants should not be afraid of investigation of CCI...In the considered opinion of the Court, appeals filed by appellants are devoid of merit and deserve to be dismissed," Bar and Bench cited quoting from the order. 

The matter was reserved for judgement on June 25.

US retail giant Amazon had approached the Karnataka High Court against a CCI order that had called for a Director General (DG) investigation into allegations of anti-competitive conduct in the online sale of smartphones on its platform. The CCI initiated the probe after Delhi Vyapar Mahasangh (DVM), an organisation whose members comprise traders from many micro, small and medium enterprises, had levelled allegations of predatory pricing, deep discounting, preferential seller listing, and exclusive partnerships, among others, against Amazon and Flipkart.

However, on June 11, Justice P.S. Dinesh Kumar dismissed the petitions filed by Amazon and Flipkart. Subsequently, appeal petitions were filed by them challenging that order. 

The setback comes even as the e-commerce firms are facing scrutiny in the country. It also comes at a time when the new draft e-commerce guidelines is also being widely discussed and debated.