CCI dismisses abuse of dominance charge against Amazon India

CCI dismisses abuse of dominance charge against Amazon India
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14 Sep, 2020

The Competition Commission of India (CCI) has dismissed an abuse of dominance complaint against ecommerce firm Amazon, filed by apparel maker Beverly Hills Polo Club (BHPC).

In a submission to the fair trade watchdog, BHPC accused Amazon Seller Services, the Seattle-based ecommerce major’s Indian arm, and its affiliates Amazon Exports Sales and Cloudtail India, of unfair and anti-competitive practices that adversely impacted the visibility of BHPC’s fashion products, and of abuse of dominance, hindering its entry into the market.

The complainant said that Amazon’s significant market share in online retail space and its disproportionate capital spending on the market, despite incurring heavy losses, depict its dominance. 

“… The new entrants in the market not having capital to spend on discounts and incentives, get stifled and eventually get eliminated on account of the exclusionary conduct of the OPs (opposite parties, ie Amazon entities),” the Dutch company said in its complaint.

BHPC, which only sells through its own websites, said it opposed Amazon’s modus operandi that involves selling counterfeit, unlicensed or unauthorised products bearing the BHCP brand name on the marketplace. 

“The OPs are resorting to the strategy of growth over profit by offering deep discounts to establish a network for attracting users on-board. Because of the abusive conduct of OPs in selling counterfeit products of the Informants at abysmally low prices, the Informants (BHPC entities) have been unable to compete in the online retail space,” it said.

The CCI, after an investigation, said that there were several players in the market, including Flipkart, Paytm Mall, SnapDeal and Shopclues, and that it does not appear that any one platform was occupying a dominant position in the online retail market.

“… OP-1 (Amazon Seller Services) does not seem to be a dominant entity in the relevant market. In the absence of dominance, the question of abuse of dominant position does not arise,” it said.

As the matter of dominance is dismissed, the CCI said the issue of counterfeit products on Amazon marketplace does not lend itself to its antitrust scrutiny.

The commission also rejected BHPC’s allegations that Amazon offered exclusive arrangements, deep discounting and preferential listing to its preferred sellers.

“It seems unlikely that the alleged conduct would have the alleged appreciable adverse effect on competition, to conclude a prima facie case of contravention,” CCI said.

“… the Commission is of the view that no case is made out in the given facts and circumstances of the present case and the information is directed to be closed forthwith against the OPs under Section 26(2) of the Act,” the CCI added, as it closed the matter.