Amazon and its rival in India, the Walmart-owned Flipkart, did not break regulations through their selection of merchants and brands, the Competition Commission of India (CCI) said in a ruling late on Tuesday.
A case brought by the All India Online Vendors Association (AIOVA), which represents more than 3,500 online sellers, complained that Flipkart was using its dominant position to favour select sellers - an argument the CCI rejected.
AIOVA’s case alleged Flipkart was not adhering to a section of India’s anti-trust laws that says companies should not abuse a dominant market position through unfair or discriminatory pricing.
Looking at the present market construct and structure of online marketplace platforms market 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 Commission said in its ruling. CCI’s considered opinion was that Amazon has also not broken the rules. AIOVA has also brought a similar case against Amazon, alleging it favours merchants that it partly owns, such as Cloudtail and Appario. Chanakya Basa, a lawyer for AIOVA, said his client planned to appeal the decision. By their own admission Flipkart claims they are the dominant player, he said.
Flipkart and Amazon could not be immediately reached for comment. Amazon has previously denied the allegations against it.
India has a burgeoning e-commerce market, with almost 500 million Indians using the internet in 2018. The market is tipped to grow to $200 billion in a decade, according to Morgan Stanley.
A case brought by a private individual against the holding companies of the two firms claimed that their algorithmic pricing model “takes away the liberty of individual drivers to compete with each other and thus, amounts to price fixing”.
In its judgement, the CCI ruled that there was no evidence the two companies had conspired to fix prices.
Uber and Ola have also faced allegations from domestic rival Meru that investments in both companies by Japan’s SoftBank was evidence that they were abusing their market position.
Uber declined to comment. Ola did not respond to requests for comment.