Big E-Com companies face the CCI inquiry: Commerce Minister

New Delhi – Union Commerce Minister Piyush Goyal criticised that Big E-com Companies, like Amazon and Flipkart, are too proud of their financial strength. Goyal blamed in clear words that these companies have been consciously violating the Indian laws and warned that these companies would have to abide by the Indian laws. Furthermore, Union Minister Goyal warned these companies in stern words that they should face the inquiry instituted by the Competition Commission of India (CCI) if they have not done anything wrong.

Commerce Minister Goyal underlined during a webinar on Sunday ‘Indian marketplace is enormous. Besides, the government invites foreign companies to invest and make the best of this opportunity. But the policy also clarifies that these businesses have to be conducted within the framework of the Indian regulations.’ Some big e-Commerce companies invested in India following the government appeal. But these companies are violating Indian laws regularly. Discussion have been held with these E-Com companies and they have even been reprimanded in this matter. Goyal said that these companies do not pay any heed to these warnings.

Goyal pointed out that the US companies are at the forefront of violating the regulations, showing their colossal size and financial muscle. These companies have the potential of making huge investments. Efforts to capture the traditional Indian grocery markets run by the small grocery stores are also being made. Therefore, new regulations have been formulated for the big E-Com companies. Goyal clarified that the draft of these regulations is ready and these regulations will apply to both Indian and foreign E-com companies. The objective of the rules is to safeguard the consumer’s interests and ensure healthy competition.

All the companies will have to abide by the new regulations and Goyal warned that these big E-com companies should stop using their financial might to hamper the Indian interests. Goyal also said that if these E-com companies have not done anything wrong, they should not be evasive and face the CCI inquiry.

Many Indian retailers complain that the big E-Com companies use various tactics to capture a major market share of the Indian market. The interests of the small retailers are hampered, as these companies sell the products at a lower price through their portals. The trade organisations have also been repeatedly accusing that these E-Com companies even ignore consumer’s interests. The commerce ministry has received a large number of complaints in this respect.

Therefore, the competition commission of India decided to institute an inquiry to look into the violation of laws by these companies. The orders for this were issued in January last year. These orders were issued as there was prima facie evidence that these companies violate Section 26(1) of the Competition act by providing extra discounts to the customers for the benefit of a certain section of sellers. The Big E-Com companies Amazon and Flipkart have even filed independent petitions challenging the order in the Karnataka High Court, pleading to stop the inquiries. However, only two weeks ago, the Karnataka High Court dismissed the pleas of these companies, and the verdict said that inquiries could be instituted against these companies for violation of regulations.

After that, the Confederation of All India Traders Association (CAIT), the leading organisation of Indian traders, met Commerce Minister Goyal and demanded that the CCI immediately start an inquiry. Currently, Amazon and Flipkart have filed an appeal against the decision of the Karnataka High court. The commerce minister was speaking against this background.