Allegations of unfair business practices against five e-commerce sites, rejected

Competition Commission of India (CCI): CCI has rejected allegations of unfair business practices against five e-commerce sites on the ground that prima facie, no case of contravention of the provisions of either Section 3 or Section 4 of the Competition Act, 2002 was made out against them. CCI was hearing an information filed against Flipkart India Pvt. Ltd., Jasper Infotech Pvt. Ltd., Xerion Retail Pvt. Ltd., Amazon Seller Services Pvt. Ltd. and Vector E-commerce Pvt. Ltd. alleging that the said e-portals/e-commerce websites and product sellers enter into ‘exclusive agreements’ to sell the selected product exclusively on the selected portal to the exclusion of other e-portals or physical channels or through any other physical channel. It was also alleged that each e-portal has 100% market share for the product in which it is exclusively dealing and therefore, leads to dominance. A complaint was also filed by All Delhi Computer Traders’ Association (ADCTA) leveling the same charges against the five e-commerce sites. These five e-commerce sites are Flipkart.com, Amazon.com, Snapdeal.com, Jabong.com and Myntra.com. Jasper Infotech Pvt. Ltd. is the owner of Snapdeal.com, Xerion Retail Pvt. Ltd. owns Jabong.com, while Vector E-commerce Pvt. Ltd. is the company behind Myntra.com. After hearing the parties and perusal of relevant records, CCI noted that online distribution channel by the sites provide an opportunity to the consumers to compare the prices as well as the pros and cons of the product and does not violate competition norms. With regard to exclusive agreements, the Commission observed that such pacts need not result in appreciable adverse effect on competition. “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,” CCI noted. While observing that there was no prima facie evidence of violations by the e-commerce companies, Commission closed the information. CCI also abstained from going into the question of abuse of dominance. Mohit Manglani, In re v. Flipkart India Pvt. Ltd., 2015 CCI 7, decided on 23.04.2015

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