India’s competition watchdog is investigating deals between Amazon, Flipkart and their preferred sellers

• The Competition Commission of India †CCIA) examines deals between ecommerce platforms and preferred sellers.
• The competition watchdog had raided the offices of online merchants last month.
• The researchers reportedly found documents revealing “financial links” between e-commerce platforms and online merchants.

E-commerce giants Amazon India and flip card have once again come under the scanner of the Competition Commission of India (CCI). The competition watchdog’s investigative division is currently investigating documents that have revealed financial transactions between e-commerce platforms and their preferred sellers.

According to an Economic Times
reportthe research department, which is currently reviewing documents found during a
raid last month, has demanded more time from the CCI. The raids were carried out on the offices of Amazon and the Flipkart sellers.

The investigation is expected to be completed in the first week of June. However, additional time was sought to analyze data.

“Some key data was seized during the raids and the same data needs to be analyzed,” a source familiar with the investigation told ET.

According to a source, the researchers recovered documents related to “financial links” between the e-commerce platforms and merchants on the platforms. The documents also reportedly contain data related to charges.

“Deep rebates are a major antitrust issue that CCI is investigating and the documents related to the cost of purchasing the goods will provide more insight into who is subsidizing these goods,” the source added.

One of the issues under investigation by the watchdog is the equity of ecommerce giants in these online merchants.

And since some e-commerce companies own shares in the online merchants, CCI is investigating the terms of such equity investments, the source said.

The Confederation of All India Traders (CAIT), a merchant organization, has welcomed the survey and raids on the online merchants. CAIT has been an outspoken critic of ecommerce platforms and the high discounts they offer.

The CAIT had approached CCI in 2020 for abuse of market dominance by e-commerce platforms. In its petition, CAIT alleged that the e-commerce platforms forced suppliers to become preferred suppliers and then promote them over non-preferred suppliers.

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