Exclusive: India to expedite Amazon, Flipkart antitrust probe as tech focus intensifies -sources

© Reuters. FILE PHOTO: A 3D printed Amazon postal package is placed on a keyboard in this illustration taken March 25, 2020. REUTERS/Dado Ruvic/Illustration

By Aditya Kalra

NEW DELHI (Reuters) - India's antitrust watchdog plans to expedite a restarted probe into allegations of anti-competitive behaviour at Amazon.com Inc (NASDAQ:AMZN) and Walmart (NYSE:WMT) Inc's Flipkart, as it intensifies scrutiny of big-tech firms, two people close to the matter said.

The comments come as major U.S. technology firms including Twitter Inc (NYSE:TWTR) and Facebook Inc (NASDAQ:FB) are at loggerheads with the government over issues such as data privacy bills and policies some industry executives have called protectionist.

The Competition Commission of India (CCI) initiated a probe in January last year on the basis of a complaint alleging Amazon and Flipkart promoted select sellers on their e-commerce platforms and that deep discounts stifled competition.

The companies have denied wrongdoing.

Near-immediate legal challenges from the pair stalled the probe for over a year until a court last week allowed it to resume, having dismissed arguments that the CCI lacked evidence.

Though Amazon and Flipkart are likely to appeal, the CCI plans to demand information from them related to the allegations "as quickly as possible", said one of the people, who declined to be identified due to the sensitivity of the matter.

The investigation "will be expedited", the person said. Such investigations in India typically take months to complete.

Amazon declined to comment. Flipkart and the CCI did not respond to requests for comment.

PRIORITY

The CCI is speeding up all cases involving big technology firms, including by deploying additional officers for some cases and working to more stringent internal deadlines, said the two people, who are familiar with the watchdog's thinking.

"Cases involving digital firms are getting a priority at CCI as they can have significant impact on the economy and Indian startups," said one of the people.

Last year, the CCI began reviewing https://www.reuters.com/article/us-india-google-antitrust-exclusive-idUKKBN26S1M1 allegations of Google abusing the position of its Android operating system in the smart TV market, and is likely to soon order a comprehensive antitrust investigation, the people said.

Google declined to comment.

Such a probe would be the third against Google, with the Alphabet (NASDAQ:GOOGL) Inc unit already battling cases relating to Android as well as its payment app.

The CCI is also investigating practices at MakeMyTrip Ltd and privacy policy changes at Facebook's WhatsApp.

PREFERENTIAL TREATMENT

The probe into Amazon and Flipkart is restarting at a time when both are battling accusations from offline retailers that their complex business structures allow them to circumvent foreign investment rules for e-commerce.

In February, a Reuters investigation http://reut.rs/2OCOT2W based on Amazon documents showed the e-tailer for years gave preferential treatment to a small group of sellers on its Indian platform. While arguing to restart the probe, the CCI told a court in Karnataka state that the Reuters report corroborated evidence https://www.reuters.com/article/us-amazon-com-india-idUSKBN2BB1UF.

Amazon, which has said it "does not give preferential treatment to any seller", told the court https://www.reuters.com/world/india/amazon-tells-indian-court-reuters-story-is-no-reason-resume-antitrust-probe-2021-04-15 it disagreed with the Reuters report.

The antitrust body will examine the Reuters report and could use it as part of its investigation, one of the people said.

"The CCI's plan to move faster on such cases is in line with other antitrust regulators globally that are investigating digital markets like e-commerce and online search, which are dynamic and evolving fast," said an Indian antitrust lawyer who represents tech firms.