By Aditya Kalra
NEW DELHI (Reuters) – Samsung (KS:), Xiaomi (OTC:) and other smartphone companies Amazon (NASDAQ:) and Walmart (NYSE:) have partnered with Flipkart to launch their products exclusively on the e-commerce firms’ Indian websites. in violation of antitrust laws, according to regulatory reports seen by Reuters.
Antitrust investigations by the Competition Commission of India (CCI) found that Amazon and Flipkart harmed other companies by violating local competition laws by favoring select sellers, favoring certain listings and steeply discounting products, Reuters reported this week.
The CCI’s 1,027-page report on Amazon also alleged that the Indian units of five companies — Samsung, Xiaomi, Motorola (NYSE: ), Realme and OnePlus — were involved in the practice of launching “exclusive” phones in “collusion” with Amazon and its companies. affiliates, violate competition law.
In Flipkart’s case, the 1,696-page CCI report said that the Indian units of Samsung, Xiaomi, Motorola, Vivo, Lenovo and Realme have carried out similar practices.
Including smartphone makers like Samsung and Xiaomi could increase their 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 Additional Director General GV Siva Prasad said in the Amazon and Flipkart reports on the same findings.
Reuters first reported that the smartphone companies were accused of anti-competitive behavior in the CCI’s August 9, non-public report.
Xiaomi declined to comment, while other smartphone makers did not respond to requests for comment.
Amazon, Flipkart and CCI did not respond and have not commented on the findings of the reports till date.
Both CCI reports said Amazon and Flipkart “deliberately downplayed” claims of exclusive releases during investigations, but officials found the practice to be “good”.
South Korea’s Samsung and China’s Xiaomi are two of India’s largest smartphone players, with a combined market share of almost 36%, compared to China’s Vivo at 19%, Counterpoint Research data shows.
Consulting firm Bain estimates that India’s e-retail market will cross $160 billion by 2028 from $57-60 billion in 2023.
The investigation’s findings are a major setback for Amazon and Flipkart in a key growth market where they have faced the wrath of smaller retailers for years for hurting their offline businesses.
CCI also said that both companies used their foreign investments to provide subsidized rates for services such as warehousing and marketing to a number of vendors.
ONLINE SALES BOOM
Some smartphone companies – Xiaomi, Samsung, OnePlus, Realme and Motorola – have been ordered to submit their audited financial statements to the CCI for the three financial years till 2024, according to an internal CCI document dated August 28. , also seen by Reuters.
The probe into Amazon, Flipkart and their sellers was launched in 2020 following a complaint by a branch of the country’s largest retail trade association, the 80 million-member All India Traders Confederation.
The CCI will consider any objections to the findings from Amazon, Flipkart, the retail association and smartphone companies in the coming weeks and may impose fines on the companies to change their business practices.
Indian retailers have repeatedly blamed Amazon and Flipkart and smartphone companies for selling exclusive phones online, saying shopkeepers are suffering because they are not buying the latest models and customers are looking for them on shopping sites.
“Exclusive offers have had a significant impact not only on regular sellers on the platform, but also on retailers who have subsequently been provided with mobile phones,” both CCI reports said, citing analysis of data from smartphone companies.
Indian research firm Datum Intelligence estimates that 50% of phone sales were online last year, up from 14.5% in 2013. Flipkart had a 55% share of online phone sales in 2023, while Amazon had a 35% share.
