Flipkart-Amazon combine may face close scrutiny on competition aspects

While there is no formal announcement from any quarter on the possible multi-billion-dollar deal, reports indicate that discussions involving Flipkart and Amazon are going on. Engaged in intense competition, home-grown Flipkart and Amazon India are leading players in the Indian online retail market place. 

Deals beyond a certain threshold require the approval of Competition Commission of India before they are consummated. In cases where the watchdog finds possible anti-competition issues, it can call for remedial measures to address the concerns.

“The Amazon Flipkart deal will have to take the approval of CCI in order to sail through. CCI will have to examine the relevant markets and the combined market share of the two parties, which in this case would be around 80 percent (which) would pose challenges to the deal,” consultancy Corporate Professional’s Founder Pavan Kumar Vijay said. 

There have been instances where the anti-trust regulator had given approvals for mega deals subject to strict conditions. Not-for-profit group CUTS (Consumer Unity and Trust Society) International said the Flipkart-Amazon merger might impact the merchants negatively though, as they would have limited bargaining power due to absence of competition among online market platforms.

The group also noted the merger would also make the resultant entity the biggest harvester of consumer data for online shopping.