Amazon files a petition with Karnataka HC to stay CCI investigation

Amazon files a petition with Karnataka HC to stay CCI investigation
Photo Credit: Reuters
10 Feb, 2020

Ecommerce major Amazon has filed a writ petition on Monday with the Bengaluru bench of the Karnataka High Court, seeking a stay on Competition Commission of India’s (CCI) investigation order. 

On January 13, Delhi Vyapar Mahasangh (DVM), a traders body, had filed a complaint against Amazon and Walmart backed Flipkart over violation of Competition Act 2002. This led to CCI ordering a probe into the alleged business malpractices by the ecommerce companies. 

The petition has named CCI and trader associations - Confederation of All India Traders (CAIT) and DVM - as respondents and is likely to come up for hearing in a day or two. CAIT said that caveat was already filed by DVM in the court.

In its plea dated February 10, Amazon said the investigation ordered by CCI “will cause serious prejudice to the petitioner,” according to a copy reviewed by TechCircle. The petition also asked for an interim stay on the investigation ordered by CCI until the disposal of the writ petition as the investigation. The plea says that “irreparable loss and injury would be caused” to Amazon’s reputation and goodwill.

“.. it is clear that the present ‘Impugned Order has been passed without prima facie application of mind… Its findings are perverse, arbitrary and untenable in law,” the petition said.

According to CAIT and DVM, Flipkart and Amazon operate on an inventory model as opposed to a pure-play marketplace, which violates the government’s foreign direct investment guidelines

“The stay application by Amazon is ample testimony to the fact that there is something wrong in its business model,” Praveen Khandelwal, secretary general of CAIT, said.

During his recent visit to India, Amazon CEO Jeff Bezos said the company would an additional $1 billion in India by 2025. His promise, however, led to protests from members of CAIT and criticism from Minister of Commerce, Piyush Goyal.