Emir BardakçıAccording to reports seen by Reuters, an investigation carried out by the antitrust body, Competition Commission of India (CCI), has in some detail uncovered a cartel where smartphone giants Samsung, Xiaomi, and others have joined together with e-commerce platforms Amazon and Flipkart to breach competition laws through launching products exclusively on these two platforms in India. Two voluminous reports containing CCI findings detail that Amazon and Flipkart accorded preferential treatment to a few select sellers, gave preferential listing to particular product listings, and offered deep discounts to undercut smaller competitors and injure small brick-and-mortar retailers.
Investigation reports showed that companies like Samsung, Xiaomi, Motorola, Realme, Vivo, and OnePlus had joint agreements over exclusive phone launches with Amazon and Flipkart. This anti-competitive practice not only distorted the market by limiting the availability of these handsets to select platforms but also put other sellers in disfavor. For a long time now, Indian retailers of smartphones have complained that they cannot offer new models of phones like the online platforms; because of this, customers bypass the physical stores.
The complaint, filed in 2020 by the Confederation of All India Traders on behalf of its 80 million members, spurred the investigation. This is significant for both the retailers and the economy, with e-commerce set to cross $160 billion by 2028. The CCI will now look at objections filed against its findings, and the companies may have to pay fines besides modifying their business practices.
That’s a severe blow for Amazon and Flipkart, each accounting for 90% of the leading positions in the Indian online smartphone market in 2023. The CCI, therefore, called upon the concerned smartphone companies to submit related financial data regarding the last three fiscal years, which could further aggravate the problems of those companies.
The involvement of such major companies increases their legal exposure and could lead to greater scrutiny by the regulators.
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