CCI accuses Samsung, Xiaomi of collusion with Amazon, Flipkart
Samsung, Xiaomi and other smartphone companies have teamed up with Amazon and Walmart’s Flipkart to launch products exclusively on the e-commerce companies’ Indian websites, in violation of antitrust laws, according to regulatory reports seen by Reuters.
Antitrust investigations by the Competition Commission of India (CCI) have found that Amazon and Flipkart violated local competition laws by giving preference to certain sellers, prioritizing certain offers and heavily discounting products, thereby harming other companies, Reuters reported this week.
The CCI’s 1,027-page report on Amazon also said that the Indian units of five companies — Samsung, Xiaomi, Motorola, Realme and OnePlus — were “involved in exclusive” phone launches in “collusion” with Amazon and its subsidiaries, violating competition laws.
In the case of Flipkart, a 1,696-page CCI report alleged that the Indian units of Samsung, Xiaomi, Motorola, Vivo, Lenovo and Realme engaged in similar practices.
If smartphone makers like Samsung and Xiaomi get involved, it could lead to more legal and compliance issues.
“Exclusivity in business is anathema. It is not only against free and fair competition but also against the interests of consumers,” CCI’s Additional Director General GV Siva Prasad wrote in the Amazon and Flipkart reports, with identical findings.
Reuters is the first to report that the smartphone companies are accused of anti-competitive behavior in the CCI reports, which are dated August 9 and not public.
Xiaomi declined to comment, while other smartphone makers did not respond to requests for comment.
Amazon, Flipkart and the CCI did not respond and have not commented on the findings of the reports so far.
Both CCI reports said that Amazon and Flipkart “deliberately downplayed” allegations of exclusive launches during the investigation, but officials concluded that the practice was “widespread.”
Counterpoint Research data shows that South Korea’s Samsung and China’s Xiaomi are two of the largest smartphone manufacturers in India. Together, they hold nearly 36% market share, while China’s Vivo holds 19%.
Consulting firm Bain estimates that India’s e-retail market will generate revenues of over $160 billion by 2028, up from $57-60 billion in 2023.
The survey results are a major setback for Amazon and Flipkart in a key growth market, where they have for years faced the wrath of small retailers who have hurt their offline operations.
The CCI also said that both companies used their foreign investments to offer subsidised rates for services such as warehousing and marketing to a select number of sellers.
Online sales are booming
Several smartphone companies — Xiaomi, Samsung, OnePlus, Realme and Motorola — have been ordered to file their financial statements for three fiscal years ending 2024, certified by their auditors, with the CCI, according to an internal CCI document dated August 28, also seen by Reuters.
The investigation into Amazon, Flipkart and their sellers was launched in 2020 following a complaint from an affiliate of the country’s largest retailer association, the Confederation of All India Traders, which has 80 million members.
The CCI will investigate any objections to its findings from Amazon, Flipkart, the retailers’ association and smartphone companies in the coming weeks. It may impose fines and require companies to change their practices, people familiar with the matter said.
Indian retailers have repeatedly accused Amazon, Flipkart and smartphone makers of launching phones exclusively online, claiming that this disadvantaged retailers as they could not get the latest models and customers searched for them on the retailers’ websites.
“Exclusive launches had a major impact not only on the regular sellers on the platform, but also on the physical retailers who were only provided with mobile phones much later,” both CCI reports said, citing analyses of data from smartphone manufacturers.
Indian research firm Datum Intelligence estimates that 50% of phone sales were made online last year, up from 14.5% in 2013. Flipkart is expected to have a 55% share of online phone sales by 2023, while Amazon will have 35%.
© Thomson Reuters 2024
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
