SC moots transferring pleas challenging Amazon, Flipkart probe to Karnataka HC

The Supreme Court has stayed in the ongoing proceedings before the Karnataka High Court related to legal challenges mounted by sellers of Amazon and Flipkart against the Competition Commission of India’s (CCI) 2019 investigation into alleged anti-competitive practices. Karnataka High Court was to hear the matter on Tuesday. The Apex Court has also indicated that over 20 similar petitions pending before various High Courts across the country will be transferred to the Karnataka High Court for a consolidated hearing.

A Division Bench comprising Justice Abhay S. Oka and Justice Manmohan issued the interim stay while hearing the CCI’s transfer petition. The petition sought to centralize the cases to prevent any dilution of its probe into the e-commerce giants. The Court observed that such a consolidation is necessary to avoid conflicting judgments and ensure uniformity in adjudication.

The CCI initiated its investigation in 2019 following allegations of preferential treatment by Amazon and Flipkart to select sellers on their platforms. According to findings from the investigation unit concluded earlier this year, both companies were found to have breached India’s antitrust laws by engaging in practices that favoured a handful of sellers. Additionally, the report alleged that smartphone manufacturers Samsung and Vivo colluded with these platforms for exclusive online product launches, raising concerns over anti-competitive conduct.

In response, nearly two dozen cases were filed by vendors associated with Amazon and Flipkart in at least five High Courts, challenging the CCI’s investigation process. The sellers claimed procedural lapses by the antitrust watchdog and sought to quash its findings.

The Supreme Court’s order comes amid concerns raised by the CCI that these legal challenges were an attempt to “scuttle” the investigation. While staying in the Karnataka High Court proceedings, the Bench issued notices to implead parties who filed petitions in various High Courts after the CCI’s transfer petition was submitted. The Court scheduled the next hearing for January 6, 2025, when an order formally transferring all related petitions to the Karnataka High Court is expected. This development marks a significant step in expediting the resolution of the legal challenges against the CCI’s investigation, which has spotlighted critical questions about competitive practices in India’s burgeoning e-commerce sector.

With the consolidation of cases in the Karnataka High Court, legal experts believe the process will provide a more structured and efficient mechanism to address sellers’ grievances while ensuring that the CCI’s mandate to regulate market fairness remains intact.