Walmart’s Flipkart is facing yet another antitrust probe in India following a request by an appellate tribunal to look into whether the company took advantage of its eCommerce market position in the country, according to a report by Reuters.
The appeal was filed by the All India Online Vendors Association at the National Company Law Appellate Tribunal (NCLAT), following a decision by the Competition Commission of India (CCI), saying that the company did not violate antitrust rules.
On Thursday (March 5), the NCLAT said the “CCI is directed to direct the Director General to cause an investigation” into the issue.
It’s not known when the probe will begin. Flipkart and Amazon in India have both faced difficulties from traditional retailers in the country who say the companies’ deep discounts hurt small businesses.
“It’s a massive victory for all online sellers, since there is no ongoing probe against Flipkart,” said Chanakya Basa, a lawyer for AIOWA. “This order could pave a way for other online sellers to take their grievances against online platforms to the CCI.”
A Flipkart spokesperson said the company is waiting to get a copy of the order.
In a separate case, the CCI also ordered a probe into Amazon and Flipkart involving antitrust law and the practice of discounting. It was stayed by a court order recently.
Both Amazon and Flipkart also recently pushed back against a new India tax on the eCommerce market, saying that it would stifle growth in the industry.
It would involve a 1 percent tax on every sale made by a seller on the platforms, and it would start in April if approved. The tax is part of a broader plan by Indian Prime Minister Narendra Modi, who wants to up revenues from taxes to balance out weak customer demand in the country.
The Federation of Indian Chambers of Commerce and Industry (FICCI) said the tax will hurt the eCommerce industry.
The tax “would cause irreparable loss to the entire industry with increased compliance burden,” the group said. “This will also lead to reduced trading activity.”
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