On January 6, 2025, the Supreme Court of India ordered the transfer of multiple writ petitions, previously pending in various High Courts, to the Karnataka High Court. These petitions challenge the Competition Commission of India's (CCI) investigation into alleged anti-competitive practices by sellers associated with e-commerce giants Amazon and Flipkart.
Background of the CCI Investigation
The CCI initiated its investigation in January 2020 under Section 26(1) of the Competition Act, 2002, following a complaint by the Delhi Vyapar Mahasangh, a traders' association. The complaint alleged that Amazon and Flipkart were granting preferential treatment to select sellers, thereby enhancing their visibility and disadvantaging other sellers on their platforms. It was further claimed that these preferred sellers had close affiliations with the e-commerce platforms.
Legal Proceedings Leading to the Supreme Court's Decision
In June 2021, a single judge of the Karnataka High Court dismissed writ petitions filed by Amazon and Flipkart that sought to challenge the CCI's probe. Justice PS Dinesh Kumar opined that it would be unwise to halt the investigation at such a preliminary stage. This decision was subsequently upheld by a division bench of the High Court, which noted that if the companies were not involved in any legal violations, they should not evade the inquiry. In August 2021, the Supreme Court also refused to interfere with the CCI's preliminary investigation.
By August 2024, the CCI concluded its investigation, finding that Amazon and Flipkart had indeed violated competition laws by favoring select sellers and launching exclusive online products. In response, sellers associated with Amazon and Flipkart filed petitions in various High Courts—including those in Karnataka, Punjab and Haryana, Delhi, Madras, Allahabad, and Telangana—challenging different aspects of the CCI's investigation.
Supreme Court's Rationale for Transferring Petitions
A bench comprising Justice Abhay Oka and Justice Ujjal Bhuyan presided over the transfer petition filed by the CCI. The bench observed that the subject matter of these writ petitions was identical to a petition already being heard by a single bench of the Karnataka High Court. To ensure judicial efficiency and consistency in rulings, the Supreme Court ordered the consolidation of all related petitions under the jurisdiction of the Karnataka High Court. The Court also stipulated that any future petitions concerning the same subject matter should be directed to the Karnataka High Court.
Logistical Considerations for the Karnataka High Court
The Supreme Court noted that the single judge currently handling the petitions is stationed at the Dharwad bench of the Karnataka High Court. To facilitate the hearing of both pending and newly transferred petitions, the Supreme Court permitted the judge to sit at the principal bench.
Representation and Responses
Attorney General for India, R. Venkataramani, represented the CCI during the proceedings. Senior Advocate Abhishek Manu Singhvi, appearing on behalf of certain respondents, stated that his clients did not object to the transfer of the matters to the Karnataka High Court.
Implications of the Supreme Court's Decision
The Supreme Court's directive to centralize all related petitions in the Karnataka High Court aims to streamline the judicial process and avoid conflicting judgments across different jurisdictions. This move is expected to expedite the resolution of legal challenges concerning the CCI's findings against Amazon and Flipkart.
Conclusion
The transfer of these petitions to the Karnataka High Court marks a significant development in the ongoing legal scrutiny of Amazon and Flipkart's business practices in India. The forthcoming proceedings in the Karnataka High Court will be pivotal in determining the future operational landscape for these e-commerce platforms within the framework of Indian competition law.
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