The Karnataka High Court on Friday ordered a stay on the Competition Commission of India's (CCI) probe into violation of competition laws by e-commerce giants Amazon and Flipkart.
The court has asked the respondents in the matter including CCI and Confederation of All India Traders (CAIT) to file their responses within eight weeks.
The High Court was of the view that the ongoing investigation by the Enforcement Directorate (ED) should be first be completed. Last year, the ED initiated investigation against both Amazon and Flipkart for alleged violation of the foreign exchange law.
Amazon had on Monday filed a writ petition in the Karnataka High Court seeking stay on the CCI probe order into its alleged violations of the competition laws. The allegations put forth by the CCI raise some serious questions about how both these e-commerce brands function in the market.
In its plea, Amazon had sought "quashing and setting aside" of the CCI's probe order dated January 13, 2020, claiming that the fair competition watchdog passed orders against the company without applying mind and caused serious loss to its reputation.
Through the order, CCI pointed out “these platforms are allegedly capable of influencing prices being charged by sellers, by providing several discounts as well as inventory to the sellers.”
Amazon had pleaded for an interim stay on the proceedings as the balance of convenience for stay lies in favour of the petitioner as a bonafide company.
Using the online platform, CCI also alleges the players can “gather data on consumer preferences and allegedly use them to their advantage.” Also, the order says the exclusive tie-ups with brands, especially smartphone brands on which these players tend to offer discounts, are preferential listings.
Hearing the news about the stay order on Friday, Praveen Khandelwal, Secretary General, the Confederation of All India Traders (CAIT) termed the interim stay as "unfortunate and unexpected". He added that the CAIT is having a discussion with its lawyers over the future legal course.
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