Vendors association challenge CCI clean chit to Flipkart

Industry:    May, 2019

The National Company Law Appellate Tribunal (NCLAT) has admitted a petition by an online vendors association challenging the competition watchdog’s clean chit to Flipkart India over allegations of unfair trade practices. The Competition Commission of India (CCI) had cleared Flipkart of allegations of abuse of market dominance last year, stating that no company enjoyed a dominant position in the online retail space.

“The appeal is admitted for hearing,” said a three-member bench led by Justice SJ Mukhopadhaya, which asked the CCI to file a reply in 10 days. The NCLAT will hear the case on July 30. In clearing Flipkart and Amazon of allegations of abuse, the CCI had stated that “it does not appear that any one player in the market is commanding any dominant position at this stage.”

The All India Online Vendors Association (AIOVA), a group of over 2,000 sellers on ecommerce marketplaces, had alleged that Flipkart was abusing its dominant position in the online retail space and selling goods below cost price, which negatively impacted sellers who were not backed by venture capital funds and investors. AIOVA alleged that Flipkart was using its dominance to enter into other markets by extending discounts and manufacturing products under private labels.

The CCI stated in its order that AIOVA had not placed any material before it to substantiate these allegations and that “the terms and conditions on which sellers access Flipkart marketplace are standard and the incentives are based on objective criteria”