Flipkart's office in Bangalore
Flipkart's office in Bangalore

Now, Flipkart moves Karnataka High Court after Amazon challenging CCI order for DG probe

Rintu Mariam Biju

Following the trail of its competitor Amazon, Flipkart has now filed a petition in the Karnataka High Court seeking to quash the order passed by the Competition Commission of India (CCI) directing a probe into allegations of anti-competitive conduct.

The plea states that CCI has directed an investigation against Flipkart without the existence of a "prima facie" case. In this regard, the petition reads,

"The impugned order had directed an investigation without making a determination of the existence of an essential jurisdictional fact, i.e., the existence of a “prima facie” case. At the outset, it is respectfully submitted that the impugned order contains no finding of the existence of a prima facie case, let alone any analysis of a violation of Section 3(1) read with section 3(4) of the Competition Act."

Flipkart petition in Karnataka High Court

The petition further points out that there is no case of an anti-competitive “agreement” between Flipkart and another enterprises, contrary to the allegations of the informant before the CCI, Delhi Vyapar Mahasangh (DMS).

The plea goes on to state that the CCI order is contrary to its past orders, practices and public statements. Previously, when similar allegations against Flipkart were alleged, the CCI returned its prima facie findings that the e-commerce company had not violated any provision of the Competition Act, the plea claims.

Further, the plea notes that in April, 2019, the CCI had initiated a “Market Study on E-commerce in India” (Market Study) and obtained submissions from various stakeholders for the same. In the Market Study, the CCI had advocated for a “non-interventionist” and “self-regulation” approach towards e-commerce players, the plea states.

Allegations made by DMS such as deep discounting, exclusivity arrangement, and preferential treatment fall within the scope and ambit of FEMA, the petitioner argues. It is further submitted that since the Enforcement Directorate (ED) is presently investigating the petitioner for the same allegations raised by the informant, CCI cannot stray into its jurisdiction.

The petition further points out that the CCI failed to look into and assess the bonafides of the informant, which is a requirement under Section 26(1) of the Competition Act. That being said, the petitioner states that the Confederation of All India Traders (CAIT) had been filing various cases of a similar nature before the High Courts of Delhi and Rajasthan, as well as the CCI.

It is further claimed that the CCI order is contrary to the principles laid down by the Supreme Court in the case of CCI V. Steel Authority, where the Apex Court held that the while passing an order under Section 26(1), the CCI has to express its mind in no uncertain terms that a prima facie case exists.

In the light of the above arguments, Flipkart has prayed to quash the CCI order that was passed in January 2020.

As interim relief, Flipkart has sought for staying further operation and investigation with regard to the CCI order.

Earlier this month, Amazon had filed a petition before the Karnataka High Court seeking to quash the probe ordered by the CCI against the e-commerce giant for alleged violations of Competition Law.

In its plea, Amazon stated that the CCI order was passed “without application of mind" and that it would cause irreparable loss to the reputation of the company if an investigation is allowed in the matter.

Last week, the Karnataka High Court had granted interim relief to Amazon by staying the investigation into alleged anti-competitive practices on the part of the e-commerce giant

Shardul Amarchand Mangaldas and Talwar Thakore & Associates will be representing Flipkart in the matter. The team from TT&A included Ram Kumar, Dinoo Muthappa and Shubhang Joshi.

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