Customers shop at a Samsung mobile phone store inside a mall in New Delhi.
Reuters | Anidito Mukherjee
Samsung, Xiaomi and other smartphone companies colluded with Amazon and Walmart’s Flipkart to launch products exclusively on Indian e-commerce companies’ websites in violation of antitrust laws, according to regulatory reports seen by Reuters.
Antitrust investigations conducted by the Competition Commission of India (CCI) found that Amazon and Flipkart violated local competition laws by favoring select sellers, prioritizing certain listings and discounting important products to the detriment of other companies, it said. Reuters week.
The CCI’s 1,027-page report on Amazon also said the Indian units of five companies – Samsung, Xiaomi, Motorola, Realme and OnePlus – “engaged in the practice of exclusive” phone launches in “collaboration” with Amazon and its affiliates, breaking the competition law.
In Flipkart’s case, a 1,696-page CCI report said Indian units Samsung, Xiaomi, Motorola, Vivo, Lenovo and Realme engaged in similar practices.
Including smartphone makers such as Samsung and Xiaomi in the case could increase legal and compliance headaches.
“Exclusivity in business is anathema. It is not only against free and fair competition but also against the interest of consumers,” CCI additional director general GV Siva Prasad wrote in the Amazon and Flipkart reports, in identical findings.
Reuters is the first to report that the smartphone companies have been accused of anti-competitive behavior in the CCI reports dated August 9, which are not public.
Xiaomi declined to comment, while the other smartphone makers did not respond to requests for comment.
Amazon, Flipkart and CCI did not respond and have not commented on the reports findings so far.
Both the CCI reports said that during investigations Amazon and Flipkart “deliberately downplayed” claims of exclusive launches, but officials found the practice to be “rampant”.
Counterpoint research data shows that South Korea’s Samsung and China’s Xiaomi are two of India’s biggest smartphone players, together holding nearly 36% market share, with China’s Vivo holding 19%.
India’s e-retail market is set to cross $160 billion by 2028, up from $57-60 billion in 2023, estimates consultancy Bain.
The research findings are a major setback for Amazon and Flipkart in a key growth market where they have faced the ire of small retailers for years for hurting their offline businesses.
The CCI also said that both companies used their foreign investments to provide subsidized rates for services such as storage and marketing to a select number of vendors.
Online sales boom
Some of the smartphone companies – Xiaomi, Samsung, OnePlus, Realme and Motorola – have been directed to submit their financial statements for three financial years up to 2024, certified by their auditor, to the CCI, according to an internal CCI document dated August 28 , Reuters also saw.
The investigation into Amazon, Flipkart and their sellers began in 2020 following a complaint by an affiliate of the country’s largest retailer association, the Confederation of All India Traders, which has 80 million members.
The CCI will in the coming weeks review any objections to its findings from Amazon, Flipkart, the retailer association and smartphone companies and could potentially impose fines along with ordering the companies to change their business practices, people familiar with the matter said. they know the subject.
Indian retailers have repeatedly blamed Amazon and Flipkart and smartphone companies for internet-exclusive phone launches, saying shopkeepers suffered as they did not receive the latest models and customers sought them out on shopping sites.
“Exclusive releases have not only seriously affected ordinary sellers on the platform, but also retailers, who were provided with mobile phones much later,” both CCI reports said, citing data analyzes from smartphone companies.
Indian research firm Datum Intelligence estimates that 50% of phone sales were online last year, up from 14.5% in 2013. Flipkart had a 55% share of online phone sales in 2023, and Amazon 35%.