Since the Karnataka High Court had already begun considering the cases, the CCI and the online retailers on the two platforms decided to transfer them, which led to the order.
A number of cases contesting the Competition Commission of India's (CCI) investigation into purported anti-competitive actions by e-commerce behemoths Amazon and Flipkart have been transferred by the Supreme Court to the Karnataka High Court. A bench consisting of Justices Abhay S. Oka and Ujjal Bhuyan ordered the Karnataka High Court to expedite the case's hearing on Monday.Since the Karnataka High Court had already begun considering the cases, the CCI and the online retailers on the two platforms decided to transfer them, which led to the order.In a motion, the CCI asked that all petitions contesting its inquiry into Amazon and Flipkart be consolidated and transferred to a single high court.
Cloudtail India Pvt Ltd, owned by Amazon, and other organizations were the targets of the petitions. These businesses had challenged the CCI's antitrust investigation into the two e-commerce behemoths, which was eventually extended to encompass the sellers, in writ petitions filed in a number of high courts.
The Karnataka High Court should be the only court to hear the case, the Supreme Court said orally during a hearing in December. It did not, however, issue a definitive order, and the Karnataka High Court proceedings were halted until it did.Its final ruling, which transferred the pleas to the Karnataka High Court, was passed on Monday. The matter will now be heard on January 15 by a Karnataka High Court single-judge panel.
CCI is charged with "forum shopping."
Conflicts over which high court should hear the case emerged between the CCI and e-commerce sellers during the proceedings. The vendors, who were represented by senior attorneys Abhishek Manu Singhvi and Mukul Rohatgi, proposed that the Karnataka High Court continue to hear the matter, while attorney general R Venkataramani, speaking on behalf of CII, contended that the Delhi High Court ought to consider all of the applications.
Venkataramani suggested that the Delhi High Court take over the other petitions from other high courts after the Karnataka High Court concluded the ongoing case.The Supreme Court, however, dismissed this idea, stating that it may create a risky precedent. The CCI later agreed to transfer the cases to the Karnataka High Court after the attorney general was directed to obtain explicit directions on the matter.
Amazon and Flipkart were accused by the CCI of employing the merchants to contest the inquiry through nationwide petitions. The CCI was then accused of "forum shopping" by the online retailers. When a side selects a court or jurisdiction to hear their lawsuit based on which one would provide them with the best result, this is known as forum shopping. "Bench hunting" is another name for this activity. The CCI pleaded for the transfer of 27 writ cases that Amazon had filed.and their suppliers to the Delhi High Court from different high courts in order to prevent repeated proceedings.
History of the case
The Delhi Vyapar Mahasangh, affiliated with the Confederation of All India Traders, submitted a complaint in 2019 accusing Amazon and Flipkart of favoring particular sellers, which served as the basis for the action against the online retailers. The CCI launched a formal investigation on January 13, 2020, with a focus on topics like preferential listings, deep discounting, and exclusive agreements. The goal of the inquiry was to ascertain whether these acts qualified as discriminatory practices that harmed competition.
To contest the CCI's investigation, a number of online retailers on Amazon and Flipkart filed writ petitions in different high courts. This led to the CCI's probe being halted by the high courts of Karnataka, Punjab & Haryana, and Madras.
Amazon and Flipkart contested the CCI's jurisdiction, which caused the Karnataka High Court to temporarily halt the probe in February 2020. The court did, however, permit the probe to continue in June 2021. The probe was able to continue when the Supreme Court rejected the firms' appeals in August 2021.
According to the CCI, the sellers' writ applications are an effort to curtail its investigation authority. The sellers contend, however, that without warning or a hearing, their position as "third parties" in the probe was altered to "opposite parties" in July 2024.
Major smartphone makers including Xiaomi, Samsung, OnePlus, Realme, and Motorola were launching their goods only on Amazon and Flipkart, according to a report given by the CCI's director general in August 2024. According to the inquiry, these platforms gave preference to particular merchants, which led to an unbalanced market. Concerns regarding adherence to FDI regulations were also brought up in the report, which focused on the use of foreign investments to offer exclusive discounts on services to a limited number of sellers.
Amazon and its vendors responded by submitting writ petitions to stop the investigation in a number of high courts. at one such case, Appario Retail, the former biggest seller on Amazon India, filed a petition to stop the probe at the Karnataka High Court.
Citing procedural errors in the CCI's inquiry, such as the unauthorized reclassification of companies from "third parties" to "opposite parties," the Karnataka High Court temporarily halted the proceedings on September 27, 2024. The CCI decided to petition the Supreme Court as a result.
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