In a major setback to online retailers Amazon.com Inc and Walmart's Flipkart, the Competition Commission of India (CCI) on Monday ordered a probe into the alleged violations of the competition laws by the two companies. Reuters quoted the CCI as saying that "exclusive arrangements" between mobile phone brands and e-commerce platforms were in place which gave preferential treatment to certain sellers.
The CCI reportedly said that the matter "merited" and investigation. Significantly, the CCI order came ahead of next week's visit of Amazon founder Jeff Bezos to India. Reuters noted that the CCI order was the latest setback to Amazon and Flipkart, which are already facing heat from Indian brick-and-mortar traders for alleged violation of the foreign direct investment (FDI) rules. Both them companies deny that they had violated the Indian FDI rules.
According to Reuters, the complaint against the two e-tail giants was filed by the Delhi Vyapar Mahasangh. The Director-General, which has been asked by the CCI to investigate the complaints, has been given 60 days to file a report.
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