TaxTMI 
TaxTMI 
2018 (11) TMI 1932
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....iation ('the Informant') against Flipkart India Private Limited (Flipkart India/ 'OP-1') and Flipkart Internet Private Limited (Flipkart Internet/ 'OP-2') (collectively, OPs/ Flipkart) alleging inter alia contravention of the provisions of Section 4 of the Act. 2. The Informant, a company registered under the provisions of the Companies Act, 2013, is a group of more than 2000 sellers selling on e-commerce marketplaces such as Flipkart, Amazon, Snapdeal etc. 3. OP-1, a company having its head office at Bengaluru, is engaged in wholesale trading/ distribution of books, mobiles, computers and related accessories. OP-2 is also a company having its head office at Bengaluru and is engaged in e-commerce marketplace business under the brand name Flipkart.com. 4. It is averred in the information that OP-2 connects buyers and sellers on its electronic marketplace platform, for which it receives platform fee from the registered sellers. 5. Based on an article published in ET Retail.com, an initiative of The Economic Times, under the heading, "Small online sellers ally with big vendors", dated 07.04.2018, the Informant has stated that small vendors have become allies of the big ven....
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....use an irreparable damage to the market. (vi) To impose a severe penalty on OPs so that no other platform indulges in such blatant abuse of dominance in near future. 8. Subsequent to filing of the Information, the Informant filed additional Information and again reiterated its prayer for interim relief and more specifically sought an interim order in terms of the provisions of Section 33 of the Act to restrict the alleged preferred sellers and brands to participate in upcoming Big Billion Days sales and other sales events on Flipkart.com and related marketplace platforms until the final order. 9. The Commission held preliminary conference with the parties besides perusing the material available on record. The Commission, in order to comprehend the nuances of the online retail sector, also held preliminary conference with Amazon Seller Services Private Limited ('Amazon'). 10. It is averred in the information that OP-2, which is stated to be the marketplace for selling of goods online in India, is dominant in the aforesaid market. Further, it is alleged that OP-2 has abused its dominant position in the said market, as detailed in the succeeding paragraphs. 11. Re....
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....rect investment regime. Hence, keeping in view the existing ground realities, it was urged that there is a need to define two separate relevant markets in relation to Flipkart India and Flipkart Internet's activities. 16. It was further submitted that if Flipkart India's conduct was to be assessed under Section 4 of the Act, such assessment will need to be undertaken with regard to the Business to Business ('B2B') market in India, in which Flipkart India is active and any reference to the B2C market in this context would be completely misplaced. Similarly, in relation to Flipkart Internet (which operates Flipkart marketplace), it was submitted that the definition of the relevant should be the pan-India market for retail i.e. B2C, including online and offline channels of distribution. 17. The Commission has examined the rival contentions on the relevant market advanced by both parties carefully and is of the considered opinion that the submissions made by the counsel appearing on behalf of Flipkart suggesting delineation of two distinct markets, are thoroughly misplaced. 18. Perusal of the Information reveals that the Informant has essentially made allegations against Flipk....
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....k between the buyers and sellers. It provides them a platform to interact and transact their business. E-commerce market in India is still an emerging market. Several e-commerce companies are opening physical offline stores to offer online buyers the touch-and-feel experience, thus offering an integrated shopping experience. On the other hand, various offline retailers have started their online ventures or partnered with leading e-commerce companies to attract customers on the electronic marketplace. 23. No doubt, to the end consumers, the distinction line between online and offline sellers is sometimes blurry, yet it cannot be denied that online marketplaces offer convenience for sellers as well as the buyers. For the sellers, they save costs in terms of setting up of a store, sales staff, electricity and other maintenance charges. The benefits afforded to buyers includes comfort of shopping from their homes thus saving time, commuting charges and at the same time they can compare multiple goods. Be that as it may, nothing significant turns upon such convergence on the outcome of this case as even if the market is confined to online space, the present market construct, as detai....
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....arge; yet, it cannot be disputed that the closest competitor to Flipkart is Amazon which has a valuation of around 700 billion dollars and has a global presence. With regards to entry barriers, it has to be noted that it is possible for new entrants to create online marketplace platforms, but the advantage gained by incumbents due to network effects may be difficult to breach. However, Flipkart has pointed out that there are several new players which have entered or propose to enter the e-commerce segment, such as Paytm Mall, thus indicative of low entry barriers. 29. Be that as it may, looking at the present market construct and structure of online marketplace platforms market in India, it does not appear that any one player in the market is commanding any dominant position at this stage of evolution of market. 30. As discussed earlier, Flipkart India is not dominant in the relevant market of "Services provided by online marketplace platforms for selling goods in India"; therefore, the issue of abuse of dominant position does not arise. The Commission, however, deems it appropriate to take on record the submissions made by Flipkart denying abusive conduct by its entities. In....