Published
Aug 13, 2018
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CCI responds to complaints over Walmart-Flipkart deal, says discounting practices are "already prevalent"

Published
Aug 13, 2018

The Competition Commission of India (CCI) has responded to Confederation of All India Traders (CAIT) protests over Walmart’s scheduled 77 percent acquisition of Flipkart stating that discounting is prevalent in Indian e-commerce and this may trigger a probe.

The CCI has described deep discounting as prevalent in Indian e-commerce - Flipkart- Facebook


The trade watchdog CCI has given its approval to the Walmart-Flipkart acquisition deal estimated at $16 billion (Rs 1 lakh crore). The organisation decided that, although the deal should be investigated further concerning Foreign Direct Investment (FDI) regulations, it does not fall under its jurisdiction.

Many complaints concerning the deal, especially by CAIT, have stated that Walmart has a business model that features deep discounting to an extent not allowed in India and fears that the business will do this on Flipkart’s platform as well after the deal. However, the CCI has described deep discounting as already prevalent in Indian e-commerce. As this is not allowed by law, an investigation could follow.

Online retailers including Flipkart, Amazon, and Paytm Mall, among others, all run sales that feature discounts of 70 percent on products including in the fashion category as well as smartphones and other electronics.

However, the platforms maintain that this does not flout anti-discounting regulations as the discounts are offered by third party sellers. Online marketplaces are banned from influencing prices in India, even indirectly.

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