Amazon and Walmart’s Flipkart unlikely to answer key questions in India’s antitrust probe: sources

By Aditya Kalra

NEW DELHI (Reuters) – Amazon.com Inc. and Walmart Inc.-owned Flipkart are unlikely to fully participate in a probe of the e-commerce sector by India’s antitrust watchdog over fears of disclosing trade secrets, two people with direct knowledge of the matter said.

The Competition Commission of India (CCI) is conducting what it calls an “outreach exercise” to better understand the e-commerce sector. The document was sent to several e-commerce companies and reviewed by Reuters.

The CCI document consists of 88 questions spread over 12 pages. Recipients are asked to provide pricing strategies, product information and the identity of top-selling suppliers.

Amazon and Flipkart are among India’s largest e-commerce companies, so their participation in such a study could be significant. However, the pair is unlikely to answer the questions in full because it would involve disclosing confidential commercial information, two of the people told Reuters.

“This is a very detailed study,” said one of the people, who declined to be identified because they were not authorized to speak publicly about the matter. “Companies are concerned because these are competitive, confidential matters that are critical to business.”

Amazon, Flipkart and CCI did not respond to Reuters’ request for comment.

The CCI study comes about four months after the government introduced new rules to regulate foreign investment in e-commerce, including banning the sale on its platforms of products from suppliers in which they have an equity stake. (nL3N1ZV4WU)

The rules caused dozens of products to disappear from Amazon’s Indian site overnight, shocking Walmart, which just months earlier had bought a majority stake in Flipkart for $16 billion, the largest acquisition ever by a U.S. retailer.

U.S. officials and e-commerce companies have protested the rules, which were widely seen as designed to win the support of small businesses ahead of a general election that the current administration won in a landslide election this month.

To better understand the e-commerce sector, the CCI in its document asks companies for basic data such as the number of employees, but asks online marketplace operators more sensitive questions, such as how they collect fees from sellers on their platforms.

It also asks questions about contracts between e-commerce companies and sellers.

There is no indication that participation in the survey is mandatory, with the CCI stating in the document that the survey “is not part of any investigation and/or inquiry in any of the ongoing proceedings” before the supervisory authority.

(Reporting by Aditya Kalra; Additional reporting by Sankalp Phartiyal; Editing by Martin Howell and Christopher Cushing)