NEW DELHI, Sept 14 (Askume) – Samsung, Xiaomi and other smartphone companies have accused Amazon and Xiaomi of violating U.S. antitrust laws by launching products exclusively on the e-commerce companies’ Indian websites, particularly in a collusion between Walmart and Flipkart, according to a regulatory report seen by Askume .
Askume reported this week that an antitrust investigation by the Competition Commission of India (CCI) found that Amazon and Flipkart violated local competition laws by favouring specific sellers, prioritising certain items and offering deep discounts on products, and that other companies suffered losses as a result.
The CCI’s 1,027-page report on Amazon also said that Indian subsidiaries of five companies – Samsung (005930.KS) , Xiaomi, Motorola, Realme and OnePlus – colluded with Amazon and its affiliates to violate competition laws.
Taking Flipkart as an example, the 1,696-page CCI report said its Indian subsidiaries such as Samsung, Xiaomi, Motorola, Vivo, Lenovo, and Realme have also adopted similar practices.
The involvement of smartphone makers like Samsung and Xiaomi in the case could increase their legal and compliance problems.
“Exclusivity is anathema to business. It is not only against free and fair competition but is also detrimental to the interest of consumers,” CCI additional director general GV Siva Prasad wrote in a report on Amazon and Flipkart.
As first reported by Askume, the CCI report accused the smartphone company of anti-competitive behaviour. The report, dated August 9, has not yet been made public.
Xiaomi (1810.HK) declined to comment, and other smartphone makers did not respond to requests for comment.
Amazon (AMZN.O) , Flipkart and CCI did not respond and have not yet commented on the report’s findings.
Both CCI reports said Amazon and Flipkart “deliberately downplayed” the exclusivity allegations during the investigation, but officials found the practice was “widespread”.
Counterpoint Research data shows that South Korea’s Samsung and China’s Xiaomi are the two largest smartphone companies in India with a combined market share of about 36%, while China’s Vivo has a market share of 19%.
Consulting firm Bain estimates that India’s electronics retail market will grow from US$57–60 billion in 2023 to US$160 billion by 2028.
The findings are a major blow to Amazon and Flipkart in the key developing market, where they have faced the wrath of smaller retailers for years for hurting their offline businesses.
CCI also said the companies used their foreign investments to provide preferential rates to selected suppliers for services such as warehousing and marketing.
Online sales boom
According to an internal CCI document dated August 28 and also seen by Askume, certain smartphone companies – Xiaomi, Samsung, OnePlus, Realme and Motorola – are required to submit to the CCI their financial statements for three financial years ending in 2024 and get them certified by the regulator.
The investigation into Amazon, Flipkart and their sellers began in 2020 after a complaint was filed by a member of the All India Traders Federation, India’s largest retailer association with 80 million members.
The CCI will review any objections raised by Amazon, Flipkart, retailer associations and smartphone companies to its findings in the coming weeks and could impose fines and ask the companies to change their business practices, people familiar with the matter said.
Indian retailers have repeatedly accused Amazon, Flipkart and smartphone companies of launching exclusive phones online, saying buyers are losing money as they cannot find the latest models and are looking for them on shopping sites.
Both the CCI reports, citing data analysis of smartphone companies, said that “the launch of special offers has severely impacted not only the regular sellers on the platform but also the retailers who launched mobile phones later.”
Indian research firm Datum Intelligence estimates that 50% of mobile phone sales were made online last year, up from 14.5% in 2013. In 2023, Flipkart will account for 55% of online mobile phone sales and Amazon 35%.
