India probe finds Amazon, Walmart's Flipkart breached antitrust laws

An Indian antitrust investigation has found U.S. e-commerce giant Amazon and Walmart's Flipkart violated local competition laws by giving preference to select sellers on their shopping websites, according to reports seen by Reuters.

The Competition Commission of India in 2020 ordered an investigation into Amazon and Flipkart for allegedly promoting certain sellers with which they had business arrangements and giving priority to certain listings.

In a 1027-page report on Amazon and a separate 1,696-page report on Flipkart, both dated Aug. 9, the CCI investigators said the two companies were found to have created an ecosystem where preferred sellers appeared higher in search results, elbowing out other sellers.

"Each of the anti-competitive practices alleged ... were investigated and found to be true," said both reports, which are not public and are being reported by Reuters for the first time.

"Ordinary sellers remained as mere database entries," the two reports said in identical conclusions on both companies.

Amazon and Flipkart, as well as the CCI, did not immediately respond to Reuters' request for comment. They have previously denied wrongdoing and said their practices are in line with Indian laws.

The two companies will now review the report and file any objections before CCI staff decide on any potential fines.

The investigation's findings are the latest setback for Amazon and Flipkart in a country where they continue to face criticism for their business practices from smaller retailers, who say their businesses have suffered in recent years due to deep discounts offered online.

The investigation was triggered by a complaint from the Delhi Vyapar Mahasangh, which is an affiliate of the country's biggest trade body,