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E-commerce players flouting norms, revise FDI guidelines, CAIT tells govt

The Confederation of All India Traders on June 12 urged the government to revisit the foreign direct investment norms for e-commerce players, a day after the Karnataka High Court allowed the country’s antitrust watchdog to continue its probe against Amazon and Flipkart.

CAIT has hailed the order that allows the Competition Commission of India (CCI) to probe the two e-commerce giants under Section 3 of the Competition Act that deals with anti-competitive agreements.

“We have great regrets that these e-commerce companies have blatantly left no stone unturned in passing deaf ears to such policy statements and have continuously indulged in unethical and illegal activities by flouting the mandatory provisions of the FDI policy in both letter and spirit,” CAIT said in a statement.

In India, e-commerce companies have to abide by “Press Note 2” that bars marketplaces from selling their inventory as well as deciding the price of the products sold on its platform. E-commerce players cannot mandate sellers to sell any product exclusively on their platforms.

On June 11, the court said an order directing investigation should be supported by “some reasoning”, which the CCI had fulfilled.

“This observation of the court has substantiated the fact that everything is not going well and therefore the investigation should continue,” the statement added.

CCI ordered an investigation against Amazon and Flipkart in January 2020 after Delhi Vyapar Mahasangh (DVM), a group representing small and medium business owners in the national capital, submitted a plea accusing Amazon and Flipkart of anti-competitive practices, predatory pricing and preferential treatment of sellers among other things.

Amazon, however, challenged the CCI order in the Karnataka High Court in February 2020. The court put the investigation on hold the same month.

In September 2020, CCI challenged the interim order in the Supreme Court. Justice Nageswara Rao sent the case back to the high court, saying the case be heard as soon as possible in October 2020. Money Control

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