Amazon and Flipkart to quash antitrust investigation; legal battles to follow

Amazon.com Inc has begun legal action in India to quash an antitrust investigation against the company, saying it could cause "irreparable" loss and damage to its reputation, according to reports.

Legal action has been taken against India by Amazon.com Inc. to kill the antitrust investigation being conducted against the company as it could cause irreparable damage to the reputation of the e-commerce website.

Investigation of Flipkart, which is owned by Walmart and Amazon was ordered by the Competition Commission of India (CCI) to understand the reason behind alleged violations of certain discounting practices and competition law.

Also read: Antitrust probe ordered against Amazon, Walmart's Flipkart in violation of competition law

India's brick-and-mortar retailers have mounted criticisms against the two e-commerce platforms, the principal ones being that the US giants are violating Indian law by racking up billions of dollars of losses to fund deep discounts and discriminating against small sellers.

All allegations have been denied by the multi-national corporations, following which was the probe ordered by CCI after a New Delhi-based trader group complained that the e-commerce giants were hurting business for other smaller players by promoting select sellers on one of the world's biggest online shopping markets.

Also read: Government looks into Flipkart, Amazon festive discounts after retailer complaints

The CCI ordered its probe after a New Delhi-based trader group complained that the e-commerce giants were promoting select sellers and in turn, hurting business for other smaller players in one of the world's biggest online shopping markets.

"The entire order passed by (the CCI) is bereft of any foundation," Amazon said in a February 10 filing to a court in the city of Bengaluru, rejecting the allegations levelled against the company.

"(The investigation order) suffers from non-application of mind as it appears to contain no reference to the finding of an appreciable adverse effect on competition," said Amazon.

Flipkart states that it was "fully compliant" with all laws in India after CCI ordered the probe. The trader group, Delhi Vyapar Mahasangh will defend its case to guarantee that the probe is not subdued or paused. Amazon has also been affected by stringent foreign investment rules in India.

After the launch of the probe last month, the Trade Minister of India said Amazon was not doing any favours by announcing the new 1 billion dollar investment, a statement which lay bare friction with the online US retailer.