The Competition Commission of India (CCI) has accused Amazon and Flipkart of entering into exclusive deals for phone launches with Samsung, Xiaomi, Motorola, Realme, OnePlus, Vivo, and Lenovo, which could potentially impact other retailers.
First reported by Reuters, the CCI investigation uncovered that Amazon and Flipkart favoured specific sellers on their platforms by giving them preferential treatment in product listings and pricing. This was evident in the case of the CMF Phone 1, which was exclusively available on Flipkart.
This practice hurt smaller competitors and local retailers, further consolidating these tech giants’ dominance in India’s booming e-commerce sector. According to CCI, both companies also offered steep discounts that affected fair market dynamics.
The smartphone manufacturers suppressed competition by keeping new models out of reach for traditional brick-and-mortar stores, thereby driving consumers to shop online.
With a combined market share of nearly 36%, Samsung and Xiaomi dominate India’s smartphone market, making this investigation critical to their future operations.
The CCI has ordered several smartphone makers to submit financial statements covering the past three fiscal years for further scrutiny. Affected companies now face potential fines and mandatory adjustments to their business practices.
The CCI investigation was initiated based on a complaint filed by the Confederation of All India Traders (CAIT) in 2020. CAIT is a forum representing over 80 million Indian retailers. With the growth of e-commerce platforms, smartphone companies have found it more convenient to strike deals with these platforms instead of directly releasing their phones into the market.
However, retailers are disadvantaged by these deals as they are unable to offer the newest phone models as swiftly as their digital counterparts.
In the coming weeks, CCI will review objections from concerned parties and potentially impose fines or mandate operational changes.
In May 2024, the U.S.-India Business Council (USIBC), representing major American companies such as Amazon, Apple, and Google urged India to reconsider its proposed Digital Competition bill.
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