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Flipkart, Amazon and Snapdeal get a breather as Competition Commission rejects charges

Gaurav Pathak
5 May 2015 2:45 PM GMT
Flipkart, Amazon and Snapdeal get a breather as Competition Commission rejects charges
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The Competition Commission of India has rejected the complaints filed against several e-commerce companies, which include Flipkart India Pvt Ltd, Jasper Infotech Pvt Ltd, Xerion Retail Pvt Ltd, Amazon Seller Services Pvt Ltd and Vector E-commerce Pvt Ltd.

The Commission did not find prima facie evidence against Flipkart, Snapdeal, Amazon, Jabong and Myntra and its ten page order read, “the Commission is of the prima facie view that no case of contravention of the provisions of either section 3 or section 4 of the Act is made out against the opposite parties.”

The Commission had enquired into the functioning of these companies for the past few months but found that no competition laws are being violated by these companies. In the complaint against the e-commerce companies, it was alleged that exclusive sale agreements are being entered into by the websites and sellers, i.e. certain products are to be available on an exclusive portal.

However, the Commission in its order noted, “It does not seem that such arrangements create any entry barrier for new entrants. It seems very unlikely that an exclusive arrangement between a manufacturer and an e-portal will create any entry barrier as most of the products which are illustrated in the information to be sold through exclusive e-partners (OPs) face competitive constraints.” It also said, “Irrespective of whether we consider e-portal market as a separate relevant product market or as a sub-segment of the market for distribution, none of the opposite parties seems to be individually dominant,” and “There are several players in the online retail market which have been arrayed as opposite parties in the present case, offering similar facilities to their customers.”

The Commission however did not consider it to be necessary to dwell into the question of abuse of dominance by the e-commerce companies.

You may read more of our coverage on Competition Commission of India here.

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