Samsung, Xiaomi and other smartphone companies colluded with Amazon and Walmart's Flipkart to launch products exclusively on the e-commerce companies' Indian websites, violating antitrust laws, according to regulatory filings seen by Reuters.
Antitrust investigations by the Competition Commission of India (CCI) found that Amazon and Flipkart violated local competition laws by giving preference to select sellers, prioritizing certain listings and offering deep discounts on products, harming other companies, Reuters reported this week.
The 1,027-page CCI report on Amazon also said that Indian units of five companies — Samsung, Xiaomi, Motorola, Realme and OnePlus — were “involved in the practice of exclusive phone launches” in “collusion” with Amazon and its affiliates, violating competition law.
In the case of Flipkart, a 1,696-page CCI report said Indian units of Samsung, Xiaomi, Motorola, Vivo, Lenovo and Realme engaged in similar practices.
The inclusion of smartphone makers like Samsung and Xiaomi in the case could add to their legal and compliance headaches.
“Exclusivity in business is anathema. It is not only against free and fair competition but also against the interests of consumers,” CCI Deputy Director General GV Siva Prasad wrote in the Amazon and Flipkart reports, in identical conclusions.
Reuters is the first to report that smartphone companies have been accused of anti-competitive behavior in the ICC reports, which are dated August 9 and are not public.
Xiaomi declined to comment, while other smartphone makers did not respond to requests for comment.
Amazon, Flipkart and the CCI did not respond and have not yet commented on the findings of the reports.
Both CCI reports claim that during investigations, Amazon and Flipkart “deliberately reinstated” claims of exclusive launches, but officials found the practice to be “rampant.”
India's e-retail market is estimated to surpass $160 billion by 2028, up from $57-60 billion in 2023, according to consultancy Bain.
The findings of the investigation are a major setback for Amazon and Flipkart in a key growth market where they have faced the ire of small retailers for years for hurting their offline businesses.
The CCI also alleged that both companies used their foreign investments to offer subsidized rates for services such as warehousing and marketing to a select number of sellers.
Rise of online sales
Some of the smartphone companies – Xiaomi, Samsung, OnePlus, Realme and Motorola – have been ordered to submit their financial statements for three fiscal years up to 2024, certified by their auditor, to the CCI, according to an internal CCI document dated August 28, also seen by Reuters.
The investigation into Amazon, Flipkart and their sellers was triggered in 2020 by a complaint from an affiliate of the country's largest retail association, the All India Traders Confederation, which has 80 million members.
The CCI will review in the coming weeks any objections to its findings by Amazon, Flipkart, the retailers' association and smartphone companies, and could potentially impose fines as well as force the companies to change their business practices, people familiar with the matter said.
Indian retailers have repeatedly accused Amazon, Flipkart and smartphone companies of exclusive online phone launches, saying merchants suffered because they failed to stock the latest models and customers sought them out on shopping websites.
“The exclusive launches not only severely affected the platform's regular sellers but also traditional retailers who were provided with handsets at a much later date,” both CCI reports said, citing data analysis from smartphone companies.
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(This story has not been edited by Agency staff and is auto-generated from a syndicated feed.)