Samsung, Xiaomi accused of anti-competitive practices in India
What's the story
The Competition Commission of India (CCI) has accused major smartphone manufacturers including Samsung and Xiaomi, of violating antitrust laws, according to Reuters.
The regulatory body alleges that these companies have been colluding with e-commerce giants Amazon and Flipkart for exclusive product launches on their Indian platforms.
This revelation is part of an extensive investigation conducted by the CCI into potential breaches of local competition laws by these online marketplaces.
Report findings
Report details alleged antitrust violations
The CCI's investigation reports, spanning over 1,000 pages each for Amazon and Flipkart, suggest that these platforms have been favoring certain sellers and offering significant product discounts.
This practice is believed to have adversely impacted other businesses.
The Indian divisions of Samsung, Xiaomi, Motorola, Realme, OnePlus (for Amazon), and Vivo, and Lenovo (for Flipkart) were specifically named in the reports as being involved in these exclusive launch strategies.
Exclusivity critique
CCI criticizes exclusivity in business practices
The CCI has strongly criticized the exclusivity in business practices adopted by these companies.
G.V. Siva Prasad, Additional Director General at the CCI, stated in both reports that "Exclusivity in business is anathema. Not only is it against free and fair competition but also against the interest of consumers."
The reports also revealed that during their investigations, Amazon and Flipkart "deliberately downplayed" allegations of exclusive launches despite evidence suggesting such practices were widespread.
Financial scrutiny
Smartphone companies asked to submit financial statements
The CCI has requested smartphone companies to provide their audited financial statements for three fiscal years up to 2024.
This request was made in an internal CCI document dated August 28.
The investigation into Amazon, Flipkart and their sellers was initiated in 2020 following a complaint from an affiliate of the Confederation of All India Traders (CAIT), which represents over 80 million members.
Potential penalties
CCI may impose fines, mandate changes in business practices
The CCI is expected to review any objections to its findings from Amazon, Flipkart, the retailer association and the smartphone companies in the coming weeks.
Depending on this review, it could potentially impose fines and require companies to alter their business practices.
This development comes as a significant blow for Amazon and Flipkart in a crucial growth market, where they have been facing criticism from small retailers for years.