Fair trade regulator Competition Commission of India (CCI) dismissed a complaint of abuse of dominance and unfair business practices against the Indian units of ecommerce giant Amazon by the owner of a popular apparel brand.
Netherlands-based Lifestyle Licensing BV and Lifestyle Equities CV, which owns and distributes Beverly Hills Polo Club (BHPC), accused Amazon India of selling their counterfeited or unlicensed products at heavily discounted prices on its platforms. They said the exclusive arrangements between Amazon India and preferred sellers cause an exclusionary effect to other sellers on the ecommerce platform.
Moneycontrol reviewed the CCI order passed under Section 26(2) of the Competition Act, 2002.
Referring to other competitors, such as Paytm Mall, Snapdeal, Shop Clues etc, in the Indian online fashion retail market, the CCI ruled that Amazon India is not dominant, and therefore, “no abuse of dominance is made out”. “The nature of the market is dynamic,” the CCI said in an order on September 11, 2020.
“The CCI has adopted a nuanced approach while assessing Amazon's dominance in the relevant market,” said Ram Kumar Poornachandran, a partner at Talwar Thakore & Associates (TT&A), who specialises in competition law.
Lifestyle Equities CV and Lifestyle Licensing BV filed the complaint against Amazon Seller Services (Amazon India), Amazon Exports Sales (Amazon Exports) and Cloudtail India, a joint venture between Amazon and NR Narayanamurthy’s Catarmanran Ventures.
The Netherlands-based companies alleged that Amazon India is dominant in the online fashion retail in India on account of its high market share of 31.1 percent, deep pockets, and high gross merchandise value.
The CCI noted that the complainants have relied on its observations in an earlier order it passed to bolster their allegations. That case, now held up in the Karnataka High Court, pertains to a complaint by trade body Delhi Vyapar Mahasangh (DVM) against Walmart-owned Flipkart and Amazon India for similar arrangements centred on preferential listing, discounts etc in the online smartphone market.
The CCI said the markets for online fashion retail and smartphones are extremely different, with the online fashion market being dispersed and having a multitude of players.
There were no allegations of platform-specific exclusive launch of fashion products on the platforms, unlike in the DVM case where there were exclusive launches of smartphones on the online platforms, the regulator said.
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