India Orders Antitrust Probe of Amazon and Walmart's Flipkart
January 13 2020 - 10:44AM
Dow Jones News
By Newley Purnell
NEW DELHI -- India's antitrust watchdog ordered a probe into
whether Amazon.com Inc. and Walmart Inc.'s Flipkart have violated
competition laws, New Delhi's latest move to try to rein in
American tech giants that dominate its burgeoning internet
economy.
The investigation launched by the Competition Commission of
India Monday said it would focus on allegations that the U.S.
titans promote "preferred sellers" of goods on their platforms,
which may have hurt smaller rivals.
"It has been alleged that most of these preferred sellers are
affiliated with or controlled by Flipkart or Amazon, either
directly or indirectly, " the order said.
A Flipkart spokesman said the company is currently reviewing the
order, and that it is "fully compliant with all applicable laws"
and foreign direct investment rules. He said the company has helped
give market access to hundreds of thousands of small businesses and
sellers.
An Amazon spokesman said the company welcomes the chance to
address the allegations. "We are confident in our compliance, and
will cooperate fully" with the commission, he said. The company has
in the past said it has helped small businesses and local companies
sell online, boosting the Indian online shopping sector.
Hoping to match China's success at fostering their own homegrown
technology companies, Indian policy makers have been taking steps
to restrict U.S. players in the world's biggest untapped tech
market.
Walmart in 2018 inked a $16 billion deal to acquire India's
biggest local e-commerce startup, Flipkart. Between them, Amazon
and Walmart's Flipkart account for more than 80% of all online
shopping sales, according to Morgan Stanley.
After Walmart sealed the acquisition, India changed its rules
governing how foreign-owned online retailers -- but not local
companies -- sold goods online, forcing Amazon and Walmart to
modify their supply chains.
The Competition Commission of India in 2018 fined Google 1.36
billion rupees ($19 million) for what it said was an abuse of its
role as the country's top search engine to favor its own
services.
Facebook Inc. and its WhatsApp messaging service, along with
Netflix Inc. and Google's YouTube, are among the country's most
used apps.
WhatsApp in February 2018 launched a trial of its first-ever
digital-payment service in India, saying it hoped to roll it out to
the rest of the country later. But it has yet to receive government
permission to expand it nationally. Analysts say it threatens to
unseat India payment startups due to WhatsApp's massive user
base.
--Krishna Pokharel and Rajesh Roy contributed to this
article.
Write to Newley Purnell at newley.purnell@wsj.com
(END) Dow Jones Newswires
January 13, 2020 11:29 ET (16:29 GMT)
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