SC Refuses to Admit Petition filed by CCI, Karnataka High Court to Decide the Plea within 6 Weeks

SC Refuses to Admit Petition filed by CCI, Karnataka High Court to Decide the Plea within 6 Weeks

The Supreme Court today has refused to entertain a petition filed by the Competition Commission of India (CCI) seeking vacation of the stay as directed by the Karnataka High Court against its order calling for an inquiry into the alleged anti-competitive practices reportedly engaged by Flipkart, Amazon and others.

The three judges bench comprising of Hon'ble Justices A.M. Khanwilkar, Justice Dinesh Maheshwari, and Justice Sanjiv Khanna have directed the CCI to approach the Karnataka High Court rather than Supreme Court. However the apex court has asked the Karnataka High Court to decide on CCI's plea to probe into the alleged anti-competitive practices of the e-commerce company within six weeks.

The complaints filed by trading bodies involving Delhi Vyapar Mahasangh, CCI on 13th January, 2020 had ordered an enquiry against Flipkart and Amazon for alleged malpractices, including deep discounting and tie-ups along with preferential sellers on their platforms.

Consequently, Amazon and Flipkart moved to Karnataka High Court seeking a stay and quashing of the probe order accordingly. To which Amazon had asserted in its petition before High Court that the CCI's investigative order had been passed "without application of mind" and would cause irreparable loss/injury to the goodwill/reputation of the company if an investigation is allowed.

In its order passed on January 13 this year, the CCI prima facie had observed that there appears to be an exclusive partnership between smartphone manufacturers and the two e-commerce platforms for the exclusive launch of smartphone brands. In this light, it was held,

"Thus, exclusive launch coupled with preferential treatment to a few sellers and the discounting practices create an ecosystem that may lead to an appreciable adverse effect on competition."

Solicitor General appearing for CCI during the hearing addressed that the probe was administrative in nature and does not hampers or affects the rights and liberties of anybody. It was asserted that even after "Repeated Requests", the case was not taken up for hearing by the High Court.

Solicitor General, Mr. Tushar Mehta went onto highlight the significant "wider issue" which apparently pertains to the present matter and urged that the Court to keep must keep the petition pending. Further Senior Advocate Abhishek Manu Singhvi also argued that CCI had no option but to approach the Apex Court after a long delay of 209 days, devoid of seeking relief from a Division Bench of the High Court first.

The Supreme Court while granting a period of six weeks to Karnataka High Court to hear the matter added that if in case High Court does not provides them with a decision, then in that case the petition is likely to be revived in the Apex Court.