What's wrong in giving discounts on rental to sellers: Flipkart to Karnataka HC

Flipkart sees nothing wrong in giving discounts on “rentals” to its sellers but that is being reported as an admission that it is influencing prices, Harish Salve, counsel of  the Walmart-owned e-commerce major, said on June 22 amid the raging debate on whether the company was violating India’s foreign investment norms.

"...if the allegation is of burn, if I am giving a discount in our rental to somebody then what's wrong?" Salve said during the proceedings before a division bench comprising Justice Satish Chandra Sharma and Justice Nataraj Rangaswamy.

He was clarifying his stance from the argument he presented a day before. He had argued if there was anything wrong if the company reduced rates for sellers who offered discounts to the consumers.

"I suddenly read in the newspapers ...arguments such as ... my client has been influencing prices. I have argued before your lordship that my client is entitled to tell sellers what price to fix. I don't know where they get it from. I said if the allegation is of burn, if I am giving a discount in our rental to somebody, then what's wrong. That becomes... ‘Flipkart now admits in court, it is influencing prices and violating FDI’," he said in the court adding that now a parallel debate is going on by the side on whether the company was right or wrong.

Press Note 2 bars e-commerce companies from directly or indirectly influencing the price of the goods sold on their platforms.

Flipkart did not immediately respond to the media query.