TaxTMI 
TaxTMI 
2015 (4) TMI 1354
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.... For the Opposite Party No. 5:,. Shri Amit Tambe, Advocate,. Shri Gautam Chawla, Advocate All Delhi Computer Trader Association:,. Shri Mahinder Aggarwal,. Shri Swarn Singh ,.Shri Munish Sharma For the Informant: The Informant in person. ORDER Order under Section 26(2) of the Competition Act, 2002 1. The present information has been filed under section 19(1)(a) of the Competition Act, 2002 (the 'Act') by Mr. Mohit Manglani (hereinafter, the 'Informant') against M/s Flipkart India Private Limited (hereinafter,'OP 1'),M/s Jasper Infotech Private Limited (hereinafter,'OP 2'), M/s Xerion Retail Private Limited (hereinafter,'OP 3'), M/s Amazon Seller Services Private Limited (hereinafter, 'OP 4'), M/s Vector E-commerce Private Limited (hereinafter,'OP 5') and other e-commerce/portal companies (collectivelyhereinafter,'OPs') for their alleged contravention of the provisions of section 4 of the Act. 2. Briefly, OPs are the individual e-portals or e-commerce sites for online trade and commerce. The Informant has alleged that OPs have been indulging in anti-competitive practices in the nature of 'exclusive agreements' with sellers of goods/services. It has been urged tha....
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....book 'Half Girlfriend'. Similarly, other OPs, who entered into exclusive agreements with suppliers/manufacturers of goods, also enjoy dominant position in the market for such goods. 6. Based on these allegations, the Informant has submitted that the practice of entering into exclusive agreement for sale and purchase of goods by way of e-commerce is violating the provisions of sections 3(1), 3(4) (b) & (c) and sections 4(a) (i), 4(b) (i) and 4(b) (ii) of the Act and have an appreciable adverse effect on competition in India. 7. To form prima facie opinion in the instant case, the Commission perused the documents submitted by the parties and heard the parties through their authorised representatives. Further, the Commission observed that the Director General ('DG')vide its letter dated 24.12.2014 has forwarded a complaint of one Shri Mahinder Aggarwal, President, All Delhi Computer Trader Association (ADCTA) against the e-portals/e-commerce companies who are OPs in the present case. Accordingly, the Commission decided to provide an opportunity of hearing to Shri Mahinder Aggarwal also. 8. OPs submitted that they are third party platforms and offer ready to use environment to....
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....these products without examining the actual agreements. It is further submitted that exclusivity, if any, is limited to online portals and not vis-a-vis brick and mortar stores. Accordingly, the manufacturer is free to sell the products in physical stores and on its own website. Further, it was contended that the exclusive agreement is not violative of section 3(4) of the Act as there is no appreciable adverse effect on competition (AAEC) in the relevant market.The OPs submitted that there is enough competition in the retail market and even in the e-portal marketand their respective shares are miniscule to cause any AAEC in the said market. It was contended that given the wide range of products, availability of substitutes, and consumer preferences, no single manufacturer (of apparel or books or smartphones) is able to exercise market power to cause any competition concern. 12. ADCTA, an association of computer traders, submitted that these e-portals/e-commerce websites have engaged in unfair trade practices and introduced illegal black money as Foreign Direct Investment in such business. It was contended that OPs have adopted the practice of purchasing goods from distributors/d....
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.... of barriers to new entrants in the market; b) driving existing competitors out of the market; c) foreclosure of competition by hindering entry into the market; d)accrual of benefits to consumers; e) improvements in production or distribution of goods or provision of services; and f) promotion of technical, scientific and economic development by means of production or distribution of goods or provision of services to assess the effect of such exclusive arrangement between manufacturers and e-portals. 16. The bare perusal of the agreement on the touchstone of the factors laid out above suggests that such agreements do not result into AAEC. It does not seem that such arrangements create any entry barrier for new entrants. It seems very unlikely that an exclusive arrangement between a manufacturer and an e-portal will create any entry barrier as most of the products which are illustrated in the information to be sold through exclusive e-partners (OPs) face competitive constraints. For example, mobile phones, tablets, books, camera etc., are neither alleged nor seem to be trodden by monopoly or dominance. Further, it does not appear that because of these exclusive agreements any of ....