Amazon and Walmart-owned Flipkart received a setback this
week when the Supreme Court of India ruled that Competition Commission of India
(CCI) can continue its preliminary antitrust probe against the e-commerce giants. The CCI had launched the investigations last January following the Delhi Vyapar Mahasangh’s claims that Amazon and Flipkart’s allegedly unfair and illegal practices were taking a toll on local retailers.

 The companies are
accused of increasing their market dominance with help of exclusive tie-ups,
deep discounts and impartiality towards certain vendors though higher search
rankings and helping them with discounts during mega sales events such as
Flipkart’s Big Billion Days and Amazon’s Prime Day.

The apex court quashed separate petitions filed by the
companies seeking quashing of the probe into their alleged anti-competitive
practices. Earlier, the Karnataka High Court had also refused to stop the competition
regulator from carrying out its investigation against Amazon and Flikpart. The
companies had said smartphone manufacturers were free to sell their products exclusively
on a platform. The CCI had passed the probe order without a prima facie opinion
on the alleged nexus, they had argued.  

“… We see no reason to interfere with the impugned orders
passed by the High Court of Karnataka dismissing the Writ Appeals of the
petitioners,” a three-judge bench headed by Chief Justice N V Ramana said in
its order on Monday.

The court said it expected “big giants like Amazon, Flipkart
to volunteer for inquiry and transparency and you don’t even want it.”

Soon after the Supreme Court ruling, Amazon announced to “mutually” discontinue
its seven-year-old joint venture Prione Business Services with billionaire and Infosys
Ltd. co-founder Narayana Murthy’s company Catamaran Ventures.

Union minister Piyush Goyal who has previously expressed
concerns about the clout of big e-commerce sites Tuesday said
the government is taking steps to ensure consumers get good quality products at
affordable prices. He told the Lok Sabha that around six crore small retail
businesses providing jobs to around 12-13 crore people were suffering on
account of the growing influence of these companies. Goyal has urged the traders’
community to “prepare themselves” and seek justice by presenting their
complaints against big online retailers before the CCI.

The CCI will pass final orders in the matter after its Director
General submits the findings of the probe.