The Competition Commission of India (CCI) has found that smartphone companies like Samsung, Xiaomi, and others have colluded with Amazon and Walmart’s Flipkart to exclusively launch products on their Indian e-commerce websites, in violation of antitrust laws. The CCI reports reveal that both Amazon and Flipkart have violated local competition laws by giving preference to select sellers, prioritizing certain listings, and offering steep discounts, which have adversely affected other companies. The reports also indicate that smartphone makers like Samsung and Xiaomi were involved in exclusive phone launches in collaboration with Amazon and Flipkart, breaking competition law.
The CCI reports highlight the practice of exclusive launches as being detrimental to fair competition and consumer interests. According to officials, the investigations revealed that the practice was widespread and rampant among these companies. This development could potentially lead to legal and compliance challenges for smartphone manufacturers such as Samsung and Xiaomi. The reports emphasize that exclusivity in business is against free and fair competition, and it is important to protect the interests of consumers. However, Xiaomi declined to comment on the matter, while other smartphone makers did not respond to requests for comment.
Counterpoint Research data shows that Samsung and Xiaomi are among the leading smartphone players in India, holding almost 36% of the market share collectively, with companies like Vivo also holding a significant share. India’s e-retail market is projected to exceed $160 billion by 2028, according to estimates by Bain. The investigation findings are a setback for Amazon and Flipkart in a crucial growth market where they have faced criticism from small retailers for years. The CCI has also accused both companies of using foreign investments to offer subsidised rates for services to select sellers.
Some of the implicated smartphone companies have been instructed to provide their financial statements for validation to the CCI. The investigation into Amazon, Flipkart, and their sellers was initiated in 2020 following a complaint from an affiliate of the Confederation of All India Traders. The CCI is expected to review any objections to its findings from the involved parties and may potentially impose fines or mandate changes in business practices. Indian retailers have raised concerns about exclusive phone launches online, arguing that it has impacted both ordinary sellers on the platforms and brick-and-mortar retailers.
The reports mentioned that exclusive launches have disrupted the sales dynamics for sellers, affecting shopkeepers and causing delays in providing the latest phone models to customers. With online sales of smartphones increasing significantly in recent years, companies like Flipkart and Amazon have played a major role in the online phone sales market. Data from Indian research firm Datum Intelligence indicates that online phone sales accounted for 50% of sales last year, a significant increase from 14.5% in 2013. Flipkart dominated online phone sales with a 55% market share, followed by Amazon with 35%. As the investigation unfolds, the implications for e-commerce giants and smartphone manufacturers in India remain to be seen, with potential fines and changes in business practices looming as a consequence of the CCI’s findings.
