Amazon and Flipkart may Face scrutiny over alleged seller favouritism ahead of big festive sales

The Competition Commission of India is investigating Amazon and Flipkart for allegedly favouring specific sellers, which could impact their major upcoming sales events.

India's Competition Commission investigates Amazon and Flipkart for favouring select sellers and harming market competition. (REUTERS)

The Competition Commission of India (CCI) has launched an investigation into Amazon and Flipkart, alleging breaches of local competition regulations. The probe, which started in 2020, claims that these major U.S. e-commerce platforms have shown preferential treatment to specific sellers on their sites. This favouritism reportedly included prioritising certain listings and offering additional benefits to preferred sellers.

Extensive Reports on Amazon and Flipkart Filed

According to Reuters, CCI has submitted extensive reports on both companies—1,027 pages on Amazon and 1,696 pages on Flipkart. These documents suggest that both platforms established systems favouring select sellers, enhancing their visibility in search results.

The CCI reports indicate that these practices gave certain sellers a significant edge. Amazon's report highlights that favoured sellers had their products more prominently featured in searches, which impacted customer attention and market competition. Similarly, the report on Flipkart notes that preferred sellers received marketing and logistical support at very low costs, which Flipkart reportedly used to offer phones at below-market prices, a practice described as “predatory pricing.”

The findings also suggest that these anti-competitive behaviours were not restricted to mobile phones but extended to other product categories as well. The reports represent a significant challenge for both companies, which have faced criticism from smaller retailers alleging that deep discounts and preferential treatment have harmed their businesses.

Amazon and Flipkart Respond to Allegations

Both Amazon and Flipkart have denied any wrongdoing and asserted that their operations comply with Indian regulations. The companies are expected to review the CCI's findings and address any concerns before decisions on potential penalties are made. The scrutiny adds to existing tensions, as highlighted by recent criticisms from India's commerce minister, Piyush Goyal, who accused Amazon of using investments to counterbalance losses.