Supreme Court Transfers Amazon-Flipkart Antitrust Probe to Karnataka High Court

The Supreme Court has transferred multiple petitions challenging the Competition Commission of India’s (CCI) antitrust investigation into e-commerce giants Amazon and Flipkart to the Karnataka High Court. The bench, comprising Justice Abhay S. Oka and Justice Ujjal Bhuyan, directed the Karnataka High Court to hear the case expeditiously.

The decision followed an agreement between the CCI and e-commerce sellers to move the case to Karnataka, as the court had already been handling the matter. The CCI had previously requested the consolidation of all petitions regarding its investigation into Amazon and Flipkart into one high court.

The petitions were filed against Amazon-owned Cloudtail India Pvt Ltd and other entities, which had contested the CCI’s investigation in various high courts. These challenges later expanded to include sellers.

In December, the Supreme Court had indicated that the Karnataka High Court should be the sole venue for the case. Although the court had temporarily stayed proceedings in Karnataka, it issued a final ruling on Monday, transferring the case there. The Karnataka High Court’s single-judge bench will now hear the case on January 15.

CCI Accused of ‘Forum Shopping’

During the hearings, disputes arose over which high court should handle the matter. Attorney General R Venkataramani, representing the CCI, argued that the Delhi High Court should oversee the petitions, while the sellers, represented by senior advocates Abhishek Manu Singhvi and Mukul Rohatgi, advocated for the Karnataka High Court to continue its hearings.

Venkataramani suggested that after the Karnataka High Court concluded the pending case, the remaining petitions could be transferred to the Delhi High Court. However, the Supreme Court rejected this suggestion, fearing it could set a dangerous precedent. The court instructed the attorney general to seek clear instructions on whether the CCI would agree to the transfer, which the CCI later accepted.

The CCI accused Amazon and Flipkart of encouraging the sellers to file petitions in multiple courts, potentially delaying the investigation. In contrast, the sellers claimed the CCI was engaging in “forum shopping,” or seeking out the most favorable jurisdiction for its case.

The investigation into Amazon and Flipkart began in 2019 after a complaint from the Delhi Vyapar Mahasangh, associated with the Confederation of All India Traders. The complaint accused the e-commerce platforms of favoring specific sellers. On January 13, 2020, the CCI initiated a formal investigation, focusing on issues like exclusive arrangements, deep discounting, and preferential listings, with the aim of assessing whether these practices hindered fair competition.

Sellers on Amazon and Flipkart filed writ petitions in various high courts, challenging the CCI’s probe. Several high courts, including Karnataka, Punjab and Haryana, and Madras, temporarily halted the investigation.

In February 2020, the Karnataka High Court paused the investigation after challenges to the CCI’s authority. However, in June 2021, the court allowed the probe to resume, and the Supreme Court dismissed the companies’ appeals in August 2021, allowing the investigation to continue.

The CCI views the sellers’ writ petitions as attempts to obstruct its investigation. Sellers argue that their status as “third parties” in the investigation was changed to “opposite parties” without notice or a hearing in July 2024.

In August 2024, the CCI’s director general submitted a report revealing that top smartphone brands, such as Xiaomi, Samsung, OnePlus, Realme, and Motorola, were launching exclusive products on Amazon and Flipkart. The report indicated that these platforms prioritized certain sellers, leading to an imbalanced marketplace and raised concerns about compliance with foreign direct investment (FDI) regulations.

In response, Amazon and its sellers filed writ petitions in multiple high courts to stop the investigation. One of these petitions, filed by Appario Retail, formerly the largest seller on Amazon India, was presented to the Karnataka High Court.

On September 27, 2024, the Karnataka High Court temporarily stayed the proceedings, citing procedural issues in the CCI’s investigation, including the unauthorized reclassification of parties. This prompted the CCI to approach the Supreme Court for intervention.