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CCI Accuses Samsung, Xiaomi, and Others of Antitrust Violations in Exclusive E-commerce Deals

• ByStartupStory     |    September 16, 2024

The Competition Commission of India (CCI) has launched a major investigation into several leading smartphone manufacturers and e-commerce giants, accusing them of engaging in practices that breach antitrust laws. According to a recent probe by the CCI, companies including Samsung, Xiaomi, Motorola, Realme, and OnePlus have been found to be involved in exclusive launch deals with Amazon and Flipkart, contravening local competition regulations.

The investigation, detailed in two extensive reports seen by Reuters, alleges that Amazon and Flipkart gave preferential treatment to certain sellers, prioritized specific listings, and offered steep discounts that disadvantaged other companies and restricted competition. The CCI’s findings indicate that these practices were carried out in collusion with the Indian units of these smartphone makers.

The CCI’s 1,027-page report on Amazon highlighted that Samsung, Xiaomi, Motorola, Realme, and OnePlus were implicated in “exclusive” phone launches, which were conducted in “collusion” with Amazon and its affiliates. Similarly, the 1,696-page report on Flipkart revealed that Samsung, Xiaomi, Motorola, Vivo, Lenovo, and Realme engaged in comparable practices.

“Exclusivity in business is anathema. Not only is it against free and fair competition but also against the interest of consumers,” stated G V Siva Prasad, additional director general of the CCI, in the reports on Amazon and Flipkart.

The investigation began in 2020 following a complaint from a Delhi-based traders association. Despite attempts by Amazon and Flipkart to delay the probe through multiple appeals, the Supreme Court of India dismissed their appeals on August 9, 2021, allowing the CCI to proceed with its investigation.

This development follows recent criticism from union commerce minister Piyush Goyal, who condemned Amazon India’s “predatory pricing policies” and questioned the motives behind the company’s investment plans in India. Goyal asserted that the investments were merely to mitigate losses rather than for the benefit of Indian consumers. However, he clarified that the government does not oppose online marketplaces but advocates for fair operational practices.

The CCI’s scrutiny of Amazon and Flipkart adds to the growing list of companies facing regulatory challenges in India. Google has previously faced substantial fines and mandated changes to its operations in response to the CCI’s investigations, while Apple has also been criticized for its market practices in the app marketplace segment.

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