India accuses Samsung, Xiaomi of collusion with Amazon, Flipkart – Odd News

Smartphone manufacturers are breaking competition law by giving preference to selected sellers, prioritizing auctions and offering deep discounts.

Samsung, Xiaomi and other smartphone makers have been accused of colluding with Amazon and Walmart Inc.-owned Flipkart to list products exclusively on the Indian e-commerce giants’ websites, violating antitrust laws, according to regulatory documents seen by Reuters.

The Competition Commission of India (CCI) has conducted investigations that found that Amazon and Flipkart violated Indian competition laws by favouring certain sellers, prioritising certain auctions and offering deep discounts on products, which harmed other competitors in the market.

The 1,027-page CCI report on Amazon found that the Indian units of five manufacturers — Samsung, Xiaomi, Motorola, Realme and OnePlus — were involved in “exclusive launches” of smartphones in “collusion” with Amazon and its subsidiaries, in violation of competition laws.

In the case of Flipkart, the 1,696-page report mentioned that the Indian units of Samsung, Xiaomi, Motorola, Vivo, Lenovo and Realme were found to be using similar practices.

The inclusion of smartphone majors like Samsung and Xiaomi in the case could deepen their legal and compliance woes. “Exclusivity in business is anathema. It is against fair competition as well as consumer interests,” wrote GV Siva Prasad, deputy director general of the CCI, in the Amazon and Flipkart reports, underlining the harm caused.

The CCI’s Aug. 9 reports have not been made public. Xiaomi declined to comment, while other smartphone makers did not respond to requests for comment. Amazon, Flipkart and the CCI have also not commented on the reports’ findings.

The investigation found that Amazon and Flipkart had “deliberately downplayed” allegations of exclusive launches during investigations, but the CCI said the practice was “widespread.”

Counterpoint Research data shows that the leaders of the Indian smartphone market are South Korea’s Samsung and China’s Xiaomi, whose combined market share is almost 36%, followed by China’s Vivo with 19%.

India’s e-commerce market, currently valued at $57-60 billion, could cross $160 billion by 2028, according to Bain & Company estimates. The CCI findings are a major blow to Amazon and Flipkart, which have been facing resistance from smaller Indian retailers who accuse the platforms of undermining their offline businesses.

CCI also accused the two companies of using foreign investment to subsidize warehousing and marketing services for selected suppliers.

According to an internal document dated August 28, certain smartphone makers — Xiaomi, Samsung, OnePlus, Realme and Motorola — have been required to provide the CCI with their audited financial statements for the last three fiscal years by 2024.

The investigation into Amazon, Flipkart and their sellers began in 2020 following a complaint filed by the Confederation of All India Traders, the country’s largest retail trader organisation with 80 million members.

The CCI will hear the objections from Amazon, Flipkart, the Retailers Association and smartphone manufacturers in the coming weeks. Depending on the final findings, fines could be imposed and the companies could be required to change their business practices.

Indian retailers have repeatedly accused e-commerce giants and smartphone makers of having exclusivity on online launches, saying such practices hurt traditional retailers who receive new smartphone models long after they go on sale online.

“The exclusive launches hurt not only online retailers but also brick-and-mortar retailers who received the models much later,” reads the CCI report, based on data from smartphone manufacturers.