India accuses big phone brands of colluding with Amazon, Flipkart

Some big names in the mobile tech and e-commerce industries could be in hot water in India. Recent findings suggest potentially anti-competitive practices that have been underway for years. India accuses phone companies like Samsung and Xiaomi of colluding with Amazon and Flipkart for exclusive launches.

India accuses Samsung, Xiaomi, and others of colluding with Amazon and Flipkart

In 2020, the Competition Commission of India (CCI) launched an investigation into Amazon, Flipkart, and associated sellers following a complaint filed by the Confederation of All India Traders (CAIT). The latter is India’s biggest retailer association with over 80 million members. Retailers in the country have been raising their voices for years against Amazon and Flipkart’s exclusive phone launch practices.

As a result, the CCI wrote 1,027-page and 1,696-page reports on Amazon and Flipkart, respectively. The reports mention companies like Samsung, Xiaomi, Motorola, Realme, OnePlus, Vivo, and Lenovo. All of them may have been “involved in the practice of exclusive” phone launches in “collusion” with major e-commerce platforms.

For years, retailers in the country have been raising their voices against such practices. “Exclusivity in business is anathema. Not only is it against free and fair competition but also against the interest of consumers,” CCI’s additional director general G.V. Siva Prasad said in the reports. The CAIT’s complaint reveals that retailers have been facing challenges such as delayed access to the latest phone launches. This would cause potential buyers to always turn to Amazon and Flipkart, directly affecting competition.

Contracts would include subsidies and favorable conditions for sellers.

According to the CCI reports, “exclusive launches not only severely affected the ordinary sellers on the platform, but also the brick-and-mortar retailers who received mobile phones at a much later date.” The investigation even found favorable conditions for select sellers. India’s CCI also accuses Amazon and Flipkart of offering subsidized rates for warehousing, marketing, and other services Samsung, Xiaomi, and other companies mentioned. The e-commerce platforms would have used these methods to convince companies to sign contracts for exclusive launches. These strategies would have been funded by foreign investments.

The CCI reports are not public, but Reuters has had access to them. However, none of the parties involved offered any comments related to the findings. The next step will be to review potential objections from Amazon and Flipkart to the Indian antitrust agency’s accusations. If their arguments fail to convince, the Indian antitrust agency could impose large fines and force both companies to modify their business practices in India.