Exclusive-India accuses Samsung, Xiaomi of collaborating with Amazon, Flipkart By Reuters
Written by Aditya Kalra
NEW DELHI (Reuters) – Samsung (KS: ), Xiaomi (OTC: ) and other smartphone companies have partnered with Amazon (NASDAQ: ) and Walmart (NYSE: )’s Flipkart to launch products on websites of Indian e-commerce companies for violating antitrust laws, according to regulatory reports seen by Reuters.
An antitrust investigation by the Competition Commission of India (CCI) found that Amazon and Flipkart violated local competition laws by choosing select sellers, prioritizing certain listings, and discounting products, to the detriment of other companies, Reuters reported in the country. week.
The 1,027-page CCI report on Amazon also said that the Indian units of five companies – Samsung, Xiaomi, Motorola (NYSE:), Realme and OnePlus – were “involved in making exclusive phone launches”. by partnering” with Amazon and affiliates, in violation of competition law.
In Flipkart’s case, the 1,696-page CCI report said the Indian units of Samsung, Xiaomi, Motorola, Vivo, Lenovo and Realme have engaged in similar practices.
The inclusion of smartphone makers like Samsung and Xiaomi in the case could raise their legal and compliance heads.
“Exclusivity in business is a disgrace. It is not only against free and fair competition but also against the interest of consumers,” CCI additional director general GV Siva Prasad wrote in a report on Amazon and Flipkart, in a similar finding.
Reuters first reported smartphone companies accused of anti-competitive behavior in CCI reports dated 9 Aug. and not in public.
Xiaomi declined to comment, while other smartphone makers did not respond to requests for comment.
Amazon, Flipkart and CCI did not respond, and so far have not commented on the findings of the reports.
Both the CCI reports said that during the investigation Amazon and Flipkart “deliberately downplayed” allegations of special launches, but officials found that the practice was “rampant”.
Counterpoint Research data shows that South Korea’s Samsung and China’s Xiaomi are India’s two biggest smartphone players, together holding about 36% of the market share, with China’s Vivo at 19% .
India’s e-retail market will cross $160 billion by 2028, up from $57-60 billion in 2023, estimates consulting firm Bain.
The probe’s findings are a major setback for Amazon and Flipkart in a key growth market where they have faced the wrath of small retailers for years by hurting their offline businesses.
CCI also said that both companies use their foreign investment to provide subsidized rates for services such as warehousing and marketing to a select number of retailers.
ONLINE SALES BOOM
Some of the smartphone companies – Xiaomi, Samsung, OnePlus, Realme and Motorola – have been ordered to submit their financial statements for the three financial years to 2024, certified by their auditor, to the CCI, according to an internal document of CCI dated August 28, and seen by Reuters.
An investigation into Amazon, Flipkart and their sellers was initiated in 2020 by a complaint from the country’s largest trade association, the Confederation of All India Traders, which has 80 million members.
The CCI in the coming weeks will review any objections to its findings from Amazon, Flipkart, the retailer association, and smartphone companies, and may impose fines and mandate the companies to change their business practices, people familiar with the matter said.
Indian retailers have repeatedly accused Amazon and Flipkart, as well as smartphone companies, of launching phones exclusively online, saying shopkeepers are suffering because they can’t find the latest models and customers are looking for them on shopping websites.
“The exclusive launch did not affect the traditional sellers on the platform but the brick-and-mortar sellers who have been given mobile phones over time,” said both CCI reports, citing data analysis of smartphone companies.
Indian research firm Datum Intelligence estimates that 50% of phone sales were online last year, up from 14.5% in 2013. Flipkart has a 55% share in online phone sales by 2023, and Amazon 35%.
