The
Supreme Court on Wednesday stayed the March 4 order of National Company Law
Appellate Tribunal (NCLAT) asking fair trade regulator Competition Commission
of India (CCI) to again initiate the probe against e-commerce major Flipkart
for an alleged use of its dominant position.
A bench of Chief Justice S A
Bobde and Justices A S Bopanna and V Ramasubramanian, which initially was of
the view to send back the matter to NCLAT after setting aside March 4 order and
decision on all aspects including the issue of dominant position being enjoyed
by Flipkart, later stayed appellate tribunal's decision.
The top court issued notice to All India
Online Vendors Association (sellers association) and Competition Commission of
India (CCI).
Senior advocate Harish Salve, appearing for
Flipkart, said that CCI doesn't look at the findings of the Government and
relied on the tax department findings and misread the findings of the tax
tribunal.
He said that the other e-commerce major Amazon
is against his client company and if he is not a dominant player then the
allegations of predatory pricing does not apply on Flipkart.
Mr Salve submitted that the predatory pricing
is an issue to be considered against the dominant player as a case of abuse of
power but his client has not been held as a dominant player.
The bench said that the CCI has rendered a
categorical finding that Flipkart does not have the dominant position and the
NCLAT has not reversed the findings on the dominant position.
It told the counsel for vendors association
that if they are agreed that the NCLAT should have considered the issues of
dominant position then it can remand back the matter.
To which counsel appearing for All India
Online Vendors Association (sellers association) said that they would like to
argue the matter.
The bench then issued notice and stayed the
March 4 order of NCLAT and listed the matter for further hearing.
On March
4, the NCLAT has set aside the earlier order passed by the CCI absolving
Flipkart of unfair practices using its dominant position and directed it to ask
its probe arm Director General (DG) to investigate into the allegations.
The NCLAT said that the All India Online
Vendors Association (AIOVA) had successfully made its case here.
In November 2018, the AIOVA had approached the
CCI alleging abuse of market dominance by e-commerce major.
The AIOVA had alleged abuse of market
dominance against Flipkart India Pvt Ltd, which is into wholesale
trading/distribution of books, mobiles, computers and related accessories, and
e-commerce marketplace Flipkart Internet Pvt Ltd.
It had alleged that small vendors have become
allies of the big vendors and suppliers to leading sellers such as Cloudtail,
WS Retail, etc on the Flipkart and Amazon platforms, rather than selling
directly to consumers through the online e-commerce marketplace sites.
However, passing an order on November 6, 2018,
the CCI had held that the business practices of Flipkart and Amazon are not in
violation of competition norms and rejected allegations of abuse of market
dominance made by the AIOVA.
The CCI
had ruled that looking at the present market construct and structure of online
marketplace platforms in India, "it does not appear that any one player in
the market is commanding any dominant position at this stage of evolution of
market".
The AIOVA, as mentioned in the CCI order, is a
group of over 2,000 sellers selling on e-commerce marketplaces such as
Flipkart, Amazon, Snapdeal etc.
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