In its petition, Flipkart claimed that the CCI probe is without initial evidence on whether the company's practices were harming competition.
Chennai: Following in the footsteps of Amazon, Walmart-controlled Flipkart too has legally challenged the competition watchdog’s probe ordered against it.
The move assumes importance as it comes ahead of US President Donald Trump’s visit to India and the US administration has been expressing its concerns over the tightening of FDI rules for e-commerce players.
Flipkart has approached the Karnataka High Court seeking a stay on the Competition Commission of India’s probe against it regarding violation of anti-trust laws. Amazon had earlier approached the court and secured a stay on the investigation..
In its petition, Flipkart claimed that the CCI probe is without initial evidence on whether the company's practices were harming competition. "Such an order exposes responsible corporate entities ... to the rigours of an intrusive investigation prejudicially affecting not only its credibility and reputation, but also its commercial prospects," said Flipkart.
The CCI in January had ordered a probe into alleged violations of competition laws on a complaint filed by the Delhi Vyapar Mahasangh (DVM), representing small businesses.
“It is most amazing that after Amazon, Flipkart has also reportedly filed a petition in Bangalore High Court praying the stay against investigation ordered by Competition Commission of India though order of High Court also applicable on investigation against Flipkart,” said Praveen Khandelwal, secretary general, Confederation of All India Traders (Cait).
Granting a stay on the probe, the court had found that the ongoing investigation by the Enforcement Directorate (ED) should be first completed before the CCI could initiate a probe. Last year, the ED had initiated an investigation against Amazon and Flipkart for alleged violation of foreign direct investment laws. The court had opined that FDI violations being in the realm of the ED and the adjudicating authority under the Fema, the case of CCI vs Bharti Airtel would apply to the case and the ED would have to give its report before the CCI could proceed with the matter.
The HC had also noted that while the CCI had asked Amazon for its comments in a previous case filed by All India Online Vendors' Association, it should have also called the parties in the current case.