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Karnataka HC begins hearing appeals by Amazon, Flipkart on CCI investigation

A fresh round of legal battle began between the e-commerce majors Flipkart, Amazon and the Competition Commission of India (CCI) on Friday with a Division Bench hearing appeals against the June 11 verdict of a single-judge Bench, which had upheld CCI’s decision to investigate whether the two companies have anti-competitive agreements with sellers contrary to the law.

A Division Bench, comprising Justice Satish Chandra Sharma and Justice Nataraj Rangaswamy, adjourned further hearing on the appeals after partly hearing the arguments filed by Flipkart Internet Pvt. Ltd.

Hearing delayed
The Bench could not commence hearing in the morning session as some senior advocates representing the companies could not log in to the video conference hearing, through Zoom meeting app, as the number of participants exceeded the limit of 100 fixed for each court hall.

A large number of advocates and other persons associated with the two companies, apart from media persons, and the advocates waiting for several other cases listed before the Bench had logged in to watch the proceedings virtually.

The hearing commenced at 2.30 pm after the court allowed participation of only the senior advocates and a few advocates assisting them in the appeals for the hearing session on appeals filed by the two companies to ensure smooth participation.

Later, Senior Advocate Harish Salve, appearing for Flipkart, argued that the CCI was wrong in invoking its jurisdiction under Section 3(4) of the Competition Act, 2002 as it applies only to anti-competitive agreements amongst enterprises or persons at different stages or levels of the “production chain,” and not applicable to Flipkart as it is not part of the “production chain” as it has no agreements with manufacturers.

Production chain
Salve contended that a seller, selling his product exclusively with Flipkart, cannot be treated as part of the production chain as it is for the seller to decide where he wants to sell products. A seller may wish to sell his products only at a particular mall or shop located in a particular city, etc and e-commerce portals are nothing but “electronic malls,” he pointed out. The status of “assured sellers” or “preferred sellers” given to some sellers are due to the commercial success of those sellers and will not impact as “assured” or preferred” sellers sell a variety of products and don’t sell only one product, he argued.

The Bench will continue the hearing on Monday. TheHinduBusinessline

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