Suo-motu inquiry by CCI initiated against Amazon dropped

Case Details: Allegations about private label brands related to Amazon sold on Amazon India marketplace, In re - [2022] 136 taxmann.com 198 (CCI)

Judiciary and Counsel Details

• • Ashok Kumar Gupta, Chairperson
  • Ms. Sangeeta Verma and Bhagwant Singh Bishnoi, Member

Facts of the Case

In the instant case, the regulator (CCI) had taken suo moto cognizance of the matter after a report stated that “Amazon copied products and rigged search results to promote its brands, documents show” and directed Amazon Seller Services Pvt. Ltd. (ASSPL) to file certain information as sought, duly supported by an affidavit within four weeks of receipt of the order and subsequently, on the request of ASSPL, the time for submission was extended.

Accordingly, ASSPL filed confidential and non-confidential versions of the information. However, the same was not supported by an affidavit, as was directed. Subsequently, ASSPL filed the supporting affidavit. ASSPL has submitted that the Reuters Report, relied upon by the Commission to initiate suo motu action, contained fundamental factual errors and inaccurate conclusions, which are based on a misplaced understanding of ASSPL’s business.

ASSPL further contended that it neither owns nor sells any product, including products of Amazon brands, on amazon. in and it is the sellers that offer all products including Amazon brands to customers for sale on amazon.in. They further stated that as of FY 2020-21, the gross merchandise sales arising from the sale of Amazon-branded products was 1.26% of total sales on amazon.in which is miniscule.

ASSPL stated that two wholly-owned subsidiaries of ACI own intellectual property rights in relation to Amazon brands. They license these brands through other group entities to third-party sellers in India (i.e., licensees)

CCI Held

The Commission, based on the submissions received by ASSPL on affidavit, wherein it had categorically denied the allegations contained in the Reuters Report, had decided not to pursue this inquiry at this stage. The Commission abundantly cleared that should the conduct of ASSPL or any of its related entities be found not to align with the provisions of the Competition Act, 2002 or should the submissions made by ASSPL in its affidavit be found to be incorrect, this order shall not come in the way, in any manner, in examining the conduct of ASSPL or any of its related entities either past, present or future, as may be warranted, under law.

The Commission further emphasized that the observations made in this order may not be construed as expressing any opinion on the merits of the case, in any manner, in respect of any other ongoing proceedings against ASSPL or any other entity, before the Commission or in any other Forum/Tribunal/Court.