Tuesday 21 May 2019

NCLAT to hear online vendors' plea against CCI order on Flipkart

The NCLAT has admitted a petition filed by an online vendors association challenging the orders of fair trade regulator CCI, which had absolved e-commerce major Flipkart of unfair practices using its dominant position.

The National Company Law Appellate Tribunal (NCLAT) has also approved the delay of 12 days in filing appeal (by the association) against the order of the Competition Commission of India (CCI).

"The appeal is admitted for hearing. As the respondents have appeared, no further notice need be issued," said the National Company Law Tribunal in its order on May 15.

A three-member NCLAT bench headed by Chairman Justice S J Mukhopadhaya has directed to list the matter for hearing on July 30.

The NCLAT is the appellate authority for the orders passed by the CCI since May 2017.

Passing an order on November 6, 2018, the CCI had held that the business practices of Flipkart and Amazon are not in violation of competition norms and rejected allegations of abuse of market dominance made by All India Online Vendors Association (AIOVA).

AIOVA has alleged abuse of market dominance against Flipkart India Pvt Ltd, which is into wholesale trading/ distribution of books, mobiles, computers and related accessories, and e-commerce marketplace Flipkart Internet Pvt Ltd.

The CCI had ruled that looking at the present market construct and structure of online marketplace platforms in India, "it does not appear that any one player in the market is commanding any dominant position at this stage of evolution of market".

While concluding that there is no violation of Section 4 of the Competition Act, which pertains to abuse of dominant market position, the CCI said that the Flipkart marketplace is required to comply with conditions applicable to entities involved in the business of e-commerce, as set out in the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2017.

"As such, Flipkart Internet is bound by these laws, the compliance of which is ensured by the relevant authorities," the order said.

Citing the market construct and the context of examining allegations against Flipkart, the CCI noted that there is also no case of contravention of Section 4 by Amazon as well.

AIOVA, as mentioned in CCI order, is a group of over 2,000 sellers selling on e-commerce marketplaces such as Flipkart, Amazon, Snapdeal etc.

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