The Competition Commission of India (CCI) on February 26 told the Karnataka High Court that it is a misconception that if the prices are going down it is beneficial for the customers.
"When a big player enters the space, it does that as an investment. We should be very alert once the prices go abnormally low. It is part of the strategy of big players some time to take the hit. The idea is that the smaller players will never be able to compete and will be pushed out of the market. They will then be able to jack up the prices," said Madhavi Divan, Additional Solicitor General (ASG), appearing for CCI, before Justice PS Dinesh Kumar.
The submission was made during the hearing of the challenge to the CCI order which sought an investigation into alleged anti-competitive practices by Amazon and Flipkart last year.
Both Amazon and Flipkart have made submissions challenging the CCI's orders.
Last month, Senior Advocate Gopal Subramanium, appearing for Amazon claimed that the allegation that Amazon had preferred sellers was completely incorrect. He stressed upon the fact that there was no direct relation between Amazon and any of its sellers.
However during the hearing, Diwan stressed that if there were arrangements where parties are trying to push out competition, they will not look at only formal agreements, there could also be a tacit understanding.
The ASG also highlighted the vital provisions of the competition act. She said that the Act was brought in 2002 after the liberalisation policy was brought in by the government of India.
The economy has opened up and the idea was to attract foreign investments. However at the same time this was to be done keeping the best interests of small merchants and local retailers in mind. The aim was to create a level playing field.
She stated that anyone who wished to indulge in anti-competitive behavior will spell it out in as many words. This issue therefore required an investigation.
The hearing will continue during the next week.