Online sellers on Walmart’s Flipkart store are suing regulator

NEW DELHI: Three online sellers operating on Walmart-owned Flipkart are suing India’s antitrust authority over an investigation that found they, Flipkart and rival Amazon violated competition laws, according to court documents seen by Reuters.

The filings came after antitrust investigations concluded in August found that Amazon and Flipkart, some of their sellers and smartphone brands, violated local competition laws by giving undue preference to select online sellers and prioritizing certain offers, Reuters reported.

Flipkart is one of India’s largest e-commerce players and a rival of Amazon.

In an attempt to quash the critical proceedings, three sellers on the platform have moved the Karnataka High Court to quash the inquiry report and stay the trial before the Competition Commission of India (CCI).

The suits by Amazon and Flipkart sellers could potentially delay the investigation process, which began in 2020 and was initiated after retailers from the Confederation of All India Traders filed a complaint to the regulator.

Amazon and Flipkart deny any wrongdoing.

Three Flipkart sellers – Cigfil Retail, Wishery Online, Xonique Ventures – claim in their lawsuit that they were subpoenaed for data during the investigation to help officials but were later named as defendants, which, according to court documents, contradicts due process.

“The purported investigation is arbitrary, opaque and unfair,” the sellers argued in three separate court filings that are likely to go to trial this week.

Flipkart and CCI did not immediately respond to a request for comment.

Reuters could not immediately reach the three sellers whose claims are being reported for the first time.

Last week, a former Amazon seller also sued the CCI and obtained an interim injunction blocking the investigation. The lawsuit filed with the court – seen by Reuters – argued that CCI did not notify the company before it was named as a defendant in the case.

According to a report by news website Business Standard, the CCI report on Amazon also indicated that the Indian units of five companies – Samsung, Xiaomi, Motorola, Realme and OnePlus – were “engaged in the practice of exclusive” phone launches in “collusion” with Amazon and its company associated companies, violating competition law.

In the case of Flipkart, the CCI report shows that similar practices were used by the Indian units of Samsung, Xiaomi, Motorola, Vivo, Lenovo and Realme. — Reuters