Already facing a penalty for breaching India’s antitrust laws, ecommerce major Flipkart has now been accused of anti-competitive behaviour and influencing prices of products listed on the platform.
A Madras High Court lawyer has written to DPIIT Secretary Amardeep Singh Bhalla, alleging that Flipkart “has been running selective waivers at the product level for select sellers”, ET reported.
Inc42 has not independently verified the report.
The complaint alleges that Flipkart has notified certain sellers about offering discounts on their products listed on the platform as well as its social commerce vertical Shopsy.
Madras HC lawyer K Narasimhan also shared a screenshot of the communication between Flipkart and the sellers, which reportedly showed that the ecommerce giant plans to subsidise a portion of the product discount through waivers. The ecommerce major has also been accused of automatically opting seller listings into waiver-driven offers without obtaining their consent.
The lawyer claimed that this would directly influence the pricing of select sellers and create a “skewed and non-competitive environment”, the report said.
He has asked DPIIT to take action against Flipkart, alleging that such practices create an uneven playing field in the ecommerce space and threaten to kill competition and hurt the broader seller ecosystem.
The complaint comes at a time when Flipkart and other ecommerce majors continue to face criticism in the country for their business practices. The Competition Commission of India has reportedly asked Flipkart and Amazon to furnish turnover details to set the penalty on the duo for violating the country’s competition laws.
The ecommerce majors could be fined as much as 10% of their global turnover or income, as per the 2023 amendment to the competition law.
In its investigation against Amazon and Flipkart, India’s antitrust watchdog has found that the duo was favouring select sellers on their shopping websites. Ecommerce companies have also courted controversy over their alleged predatory pricing policies, with union minister Piyush Goyal saying their explosive growth is a “matter of concern.”
The rapid growth of quick commerce firms such as Blinkit, Zepto and Swiggy Instamart has also raised eyebrows on issues ranging from predatory pricing to deep discounting tactics.
It is pertinent to note that the Ministry of Corporate Affairs has come up with the draft digital competition bill to clamp down on alleged anti-competitive practices of big tech firms.
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