Group of MSME (Micro, Small and Medium Enterprises) traders who rely on trade of smartphones and related accessories, informed Competition Commission of India (CCI) that many such traders regularly list their smartphones

The facts of the given situation are similar to decision of Competition Commission of India (CCI) in 'Re: Delhi Vyapar Mahasangh and Flipkart Internet Private Limited and its affiliated entities; Amazon Seller Services Private Limited and its affiliated entities' on 13th January, 2020. The relevant part of the decision is discussed as under: On careful perusal of allegations levelled by the informant and the documents provided, the CCI notes that there are four alleged practices on the marketplaces, namely, exclusive launch of mobile phones, preferred sellers on the marketplaces, deep discounting and preferential listing / promotion of private labels. CCI also noted several reports in the media as well as advertisements by e-commerce portals regarding exclusive launches. Based on the evidence adduced by the informants and information available in the public domain, it can be prima facie inferred that there appears to be exclusive partnership between smartphone manufacturers and e-commerce platforms for exclusive launch of smartphone brands. Thus exclusive launch coupled with preferential treatment to a few sellers and the discounting practices create an ecosystem that may lead to an appreciable adverse effect on competition. Issue of deep discounting needs to be assessed in the context of exclusive agreement. Therefore, it needs to be investigated whether the alleged exclusive arrangements, deep discounting and preferential listing are being used as an exclusionary tactic to foreclose competition and are resulting in an appreciable adverse effect on competition contravening the provisions of Competition Act, 2002. In view of this, CCI is of the opinion that there exists a prima facie case which requires an investigation by the Director General (DG) to determine whether the conduct of the Opposite Parties have resulted in contravention of the provisions of Section 3(1) of the Competition Act, 2002 read with Section 3(4) thereof and accordingly, CCI directs DG to cause an investigation to be made into the matter. In view of the above decision, it can be said that the Director General of CCI would order an investigation.