The Confederation of All India Traders (CAIT) has approached the National Company Law Appellate Tribunal (NCLAT) against the Competition Commission of India (CCI) approval for Walmart-Flipkart deal.
"In its appeal, the CAIT has prayed for reversing the order of CCI as no opportunity of hearing was given by CCI to CAIT, which made valid objections on merit as also over looking the violation of basic fundamentals of Press Note 3 of the Government," the confederation said in a statement on Tuesday.
In its appeal, CAIT has says that it filed a detailed objection against the Walmart-Flipkart deal before the CCI on several grounds. CAIT claims that the deal would lead to a huge degree of vertical integration in the market since Walmart is a global retail giant with its own range of multi-brand products.
CAIT also claims that the deal will affect other wholesalers on the platform and potentially eliminate them in the long run “by using several methods such as creation of algorithms perpetuating a search bias in favour of Walmart, and the creation of preferred sellers who would be receiving commissions and discounts which would not be available to other sellers on the platform.”
On August 8, CCI approved the deal which was announced on May 9, when global retail giant Walmart Inc revealed that it would buy a 77 per cent equity stake in Flipkart for $16 billion, subject to regulatory approval in India.
Consequently, Walmart Inc. on August 18 acquired the stake in e-commerce major.
Accordingly, Walmart now holds the majority stake in Flipkart, while the remainder of the business is held by other shareholders, including Flipkart co-founder Binny Bansal, Tencent, Tiger Global and Microsoft Corp.
Walmart's investment includes $2 billion of new equity funding to help accelerate the growth of the Flipkart business and both companies will retain their unique brands and operating structures in India.