The Competition Commission of India (CCI) probe into e-commerce platforms Amazon and Flipkart may face further delay as the Supreme Court on Friday refused to transfer the 24 pending petitions to the Karnataka High Court where most of the cases have been filed, according to sources.
The investigation by the anti-trust regulator is now under a stay imposed by various high courts until the 24 petitions are decided upon. The development assumes significance as the CCI approached the apex court on the very premise that these litigations were stalling the probe that has already stretched for four years.
The case will come up for hearing again in the Supreme Court on on December 16 where the fair trade regulator will have to respond to the proposal given by the court to transfer all the existing cases spread across high courts to the Karnataka High Court where majority of the cases were filed.
“Just because in one high court it is being heard by a single-judge bench and in other high courts, it is a division bench (of two judges), you want us to transfer. It will be accepting a very dangerous precedent,” a Supreme Court bench headed by Justice Abhay S Oka was quoted as saying in media reports.
The 24 cases have been filed by various parties, including the sellers on the e-commerce platforms, and smartphone makers like Samsung and Vivo. All these petitions have challenged the powers of the CCI to probe and conduct search and seizures.
“The question of law in these cases has to be eventually settled by the Supreme Court. Although the honourable court refused to intervene right now, the high court verdict will be challenged in the Supreme Court,” said one of the sources mentioned above. “This is because case of the sellers and mobile companies rests on the Madras High Court verdict in the MRF case. The apex court has to render its opinion on the applicability of the Madras High Court verdict.”
A lawyer privy to the case told Moneycontrol that most of the cases are in the argument stage and may take at least one-two months to be decided upon. “Then whoever gets the adverse judgement will have to move the Supreme Court delaying the probe further,” said the lawyer. “Only if the final verdict goes in favour of the CCI, the regulator can resume the probe. Even after the probe is completed, the CCI’s board will have to study the investigation and then pass orders.”
Sellers cited the MRF case to challenge their inclusion as ‘opposite parties’ by the CCI.
In January 2020, the CCI initiated a probe against Amazon, Flipkart and other affiliated parties into alleged anti-competitive practices, including giving preference of select sellers who were closely connected to the e-commerce platforms. This investigation was initiated following compliant from Delhi Vyapar Mahasangh – a lobby group for small and retail traders. Originally, the probe was against the platforms and the sellers were considered ‘third parties’ or affiliated entities who had ties to the platforms being probed.
In April 2022, the CCI had conducted a search and seizure operation on some big sellers on the e-commerce platforms when various electronic data, including emails and financial records, were seized by the commission. Subsequently in June 2024, the sellers who were raided received a communication from the CCI saying that they were being included as ‘opposite parties’ in the e-commerce probe.
On April 30,2024, Madras High Court passed an unusual verdict in a case involving tyre companies for alleged cartelisation. If this precedent is accepted by the Supreme Court, it could delay the CCI probe by another few months since the commission will have to take corrective measures and include the sellers as opposite parties in the case. However, a potential probe is unlikely to be stayed by courts, legal experts add.
The complaint was originally against JK Tyres. During the probe in 2020, the CCI sought information from other tyre companies, including MRF, and they were referred to as third parties. According to court filings, in March 2024, MRF got to know that the CCI was impleading the company as an opposite party. Then it moved the Madras High Court which ruled that the CCI could not change the status of a company from ‘third party’ to ‘opposite party’ without giving prior notice to MRF. The e-commerce sellers are now banking on this verdict to stall the CCI probe.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
