The Karnataka High Court on Friday asked the Competition Commission of India (CCI) to prove whether it had the jurisdiction to order an investigation into the alleged anti-competitive conduct of Amazon and Flipkart.
Justice PS Dinesh Kumar of the High Court remarked,
“Mr. Gopal Subramanium has made a categorical statement that Amazon is governed only under FDI, therefore ED has jurisdiction…Can you show that CCI also has jurisdiction?”
The Court further questioned counsel appearing for CCI, Additional Solicitor General Madhavi Divan, on the sufficiency of information based on which the probe against Amazon and Flipkart was ordered for alleged violations of competition law.
“You have to clarify whether the material based on which you ordered investigation, is that sufficient?”
The Court was prompted to seek this clarification after Senior Advocate Gopal Subramanium appearing for Amazon in an earlier hearing had submitted that CCI was overstepping its jurisdiction by ordering a probe into the e-commerce giant. It was his submission that only the Enforcement Directorate (ED) can look into violations of Foreign Direct Investment (FDI) Policy, and not CCI.
On Friday, CCI stated that the argument of confidentiality which was brought in by Amazon will not apply in the present case. Citing Supreme Court cases as precedents, Divan said that confidentiality will apply only in cases where trade secrets are involved. She added that matters pertaining to Competition Law are in rem.
As the hearing came to an end, Divan apprised the Bench that aspects related to FDI, material on which investigation was ordered, the informant etc will be addressed next week.
Last month, Subramanium had submitted that CCI had violated the principle of confidentiality as all its orders against Amazon were in the public realm. This, in turn, caused a huge setback to the goodwill of the e-commerce giant, he said.
During the previous hearings, Divan had countered the argument of ‘non application of mind’ in CCI’s order, which was pushed by both Amazon and Flipkart.
“We come to a decision after hearing all the parties, after applying our mind, after receiving credible information from Director General. Even if we feel that there is a prima facie case against a party, we may disagree with the DG after hearing the matter,” Divan argued.
It was also submitted on behalf of CCI that the definition of ‘consumer’ under the Competition Act is wider as it is meant to protect the end consumer as well as the retailer or manufacturer.
The Court was hearing two petitions moved by Amazon and Flipkart seeking to quash the probe ordered by CCI against them for alleged violations of Competition Law.
Over a year ago, the Court had granted interim relief to Amazon by staying the investigation. Shortly thereafter, the same relief was granted to Flipkart as well.
The matter will be heard next on March 8.