CCI also said that the discounting practice already prevalent in the market and is not specific to the Walmart-Flipkart deal.

Walmart-Flipkart deal not likely to have adverse effect on competition CCI
Atom E-commerce Monday, August 13, 2018 - 17:53

 

The Competition Commission of India, CCI, which had accorded its approval to the acquisition of 77% of Flipkart last week has released a detailed explanation for having arrived at its decision to give a go ahead to the deal.

As is known, there were many voices of protest raised against the deal and the government and CCI were approached with pleas to look into the merger proposal claiming that it would damage the interests of home-grown entities engaged in the retail sector.

CCI, in its letter, has on the one hand refuted these apprehensions that the combination of Walmart with Flipkart would be highly detrimental to the others while at the same time dismissing the kind of objections raised by some of these entities as not being within its jurisdiction. CCI says it would rather leave it to those entrusted with policy making to make the appropriate interventions.

CCI also dismissed the charges of Flipkart offering huge discounts and giving preferential treatment to some e-tailers over the others. CCI says these practices have been prevalent in the segment even before and cannot be in any way linked to this particular transaction involving Walmart taking over Flipkart. But the competition watchdog reserved its right to order any enquiry at a future date on issues relating to the anti-competitive agreements under the Competition Law.

Those arraigned against the taking over of Flipkart by Walmart, include Swadheshi Jagran Manch and there are 100 trade organisations as well. Having been turned down by the CCI, some of these outfits may approach the courts hoping for some relief, though as it stands, there does not appear to be any indication, the courts are going to offer any immediate solution.

CCI has referred to all the issues raised by the trade bodies and has mentioned that many of them are not within its ambit nor falling under the Competition Act under which the CCI has been constituted. As mentioned already, CCI says it did discuss the issue of discounting on prices within the Commission and felt these issues have not specifically arisen from the deal involving Walmart buying off Flipkart and found no reason to hold back its permission to the deal, all things otherwise considered.

CCI has even gone on to refer to other players present in the B2B and cash and carry segments, like Metro Cash and Carry, Amazon Wholesale and Reliance Retail and say it is not as if the Walmart-Flipkart combination stands to gain any dominant advantage. 

Also read: Xiaomi to take on Apple, Samsung and OnePlus in premium segment with sub-brand POCO


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