Smartphone companies colluded with Amazon and Walmart to exclusively launch products on the e-commerce platforms in India. Credit: DMYph/Shutterstock.

The Competition Commission of India (CCI) has accused top smartphone manufacturers Samsung and Xiaomi of working with e-commerce giants Amazon and Flipkart.  

The alleged collusion involves exclusive product launches on the platforms, a practice that may violate local competition laws according to Reuters, which cites regulatory reports dated 9 August 2024.

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The regulatory body’s reports, which are not public, indicated that this practice was “rampant” within the industry. 

A comprehensive CCI investigation revealed that Amazon and Flipkart gave preference to select sellers, prioritised certain listings and offered steep discounts.  

These actions reportedly disadvantaged other companies and breached antitrust regulations.  

The CCI’s scrutiny extends to the Indian units of five companies – Samsung, Xiaomi, Motorola, Realme and OnePlus – for their exclusive phone launches with Amazon.  

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Flipkart’s investigation involved similar allegations against the Indian units of Samsung, Xiaomi, Motorola, Vivo and Lenovo.  

CCI additional director general GV Siva Prasad stated: “Exclusivity in business is anathema. Not only is it against free and fair competition, but also against the interest of consumers.”  

The CCI’s findings represent a significant challenge for Amazon and Flipkart in a crucial market where they have already faced criticism from small retailers.  

The commission has also highlighted the use of foreign investments by these companies to subsidise rates for services such as warehousing and marketing, favouring a select group of sellers. 

Some smartphone companies have been directed to submit audited financial statements for the next three fiscal years to the CCI.  

The investigation, initiated by a complaint from the Confederation of All India Traders in 2020, may result in fines and require changes to business practices.