Leading smartphone manufacturers Xiaomi and Samsung have been accused of colluding with Amazon and Flipkart to launch products exclusively on their platforms. This alleged practice, highlighted in regulatory reports by the Competition Commission of India (CCI), is seen as a violation of antitrust laws and is said to have hurt smaller retailers in India.
Exclusive Deals Under Scrutiny
The CCI’s investigation revealed that smartphone companies like Samsung, Xiaomi, Motorola, Realme, and OnePlus were involved in exclusive launches on Amazon and Flipkart, two of the biggest e-commerce players in India. These exclusive agreements have been found to be in direct breach of competition laws, undermining free and fair business practices in the country. The regulator expressed concern that such deals disproportionately favored these tech giants, providing them unfair advantages at the expense of smaller offline retailers.
Impact on Local Retailers
According to the CCI’s 1,027-page report on Amazon and a separate 1,696-page report on Flipkart, these practices have significantly impacted local brick-and-mortar retailers. Indian retailers have long argued that these exclusive online launches kept them from offering the latest smartphones, driving customers to the e-commerce giants instead. The findings add fuel to the ongoing debate about how foreign-backed e-commerce firms are transforming India’s retail landscape, often to the detriment of smaller businesses.
Amazon and Flipkart Face Further Investigations
As the investigation unfolds, Amazon and Flipkart face increased scrutiny for their business practices. The companies allegedly prioritized select sellers, gave them better listings, and offered steep discounts, which further alienated other market players. Both companies have denied the charges, stating that they have always complied with local regulations.
Legal Consequences Loom
As a result of these findings, the CCI has ordered companies like Xiaomi, Samsung, and others to submit their financial statements from 2021 to 2024. The investigation was triggered by a 2020 complaint filed by India’s largest retail association, the Confederation of All India Traders (CAIT), which represents 80 million members.
The outcome of this case could lead to fines and force the companies to revise their business models, potentially ending the era of exclusive online launches.
For more detailed coverage of this issue, refer to the original report from Reuters here.
Rising Tensions in India’s Booming E-commerce Market
India’s e-commerce market is expected to grow from $57-60 billion in 2023 to over $160 billion by 2028, according to consultancy Bain. This rapid growth has put added pressure on e-commerce giants to retain market share, which has intensified competition between local retailers and foreign-backed platforms like Amazon and Flipkart. As this case develops, it will likely influence how these companies operate in one of the world’s most rapidly growing retail markets.
