India accuses Samsung, Xiaomi of colluding with Amazon, Flipkart By Reuters

By Aditya Kalra

NEW DELHI (Reuters) – Samsung, Xiaomi (OTC: ) and other smartphone companies have teamed up with Amazon (NASDAQ: ) and Walmart (NYSE: ) Flipkart to launch products exclusively on the firms’ Indian websites of e-commerce, violating antitrust laws, according to regulatory reports seen by Reuters.

Antitrust investigations by the Competition Commission of India (CCI) found that Amazon and Flipkart violated local competition laws by favoring select sellers, prioritizing certain listings and heavily discounting products to the detriment of other companies, Reuters reported last week .

The CCI’s 1,027-page report on Amazon also said that the Indian units of five companies — Samsung (KS: ), Xiaomi, Motorola (NYSE: ), Realme and OnePlus — were “involved in the practice of exclusive launches” of phones in ” collusion’ with Amazon and its affiliates in violation of competition law.

In Flipkart’s case, a 1,696-page CCI report said Indian units of Samsung, Xiaomi, Motorola, Vivo, Lenovo and Realme carried out similar practices.

Including smartphone makers like Samsung and Xiaomi in this case could increase their legal and compliance headaches.

“Business exclusivity is anathema. It is not only against free and fair competition but also against consumer interest,” CCI Additional Director General GV Siva Prasad wrote in the Amazon and Flipkart reports in identical findings.

Reuters is the first to report that the smartphone companies were accused of anti-competitive behavior in the CCI reports, which are dated August 9 and are not public.

Xiaomi declined to comment, while the other smartphone makers did not respond to requests for comment.

Amazon, Flipkart and CCI have not responded or commented on the report’s findings so far.

Both the CCI reports said that during investigations, Amazon and Flipkart “deliberately downplayed” allegations of exclusive releases, but officials found the practice to be “deplorable”.

Counterpoint Research data shows that South Korea’s Samsung and China’s Xiaomi are two of the biggest smartphone players in India, with a combined market share of nearly 36 percent, and China’s Vivo with 19 percent.

India’s e-retail market will cross $160 billion by 2028, up from $57-60 billion in 2023, estimates consultancy Bain.

The inquiry’s findings are a major setback for Amazon and Flipkart in a key growth market where they have faced the wrath of small retailers for years for hurting their offline businesses.

The CCI also said that both companies used their foreign investments to offer subsidized rates for services such as storage and marketing to a select number of vendors.

ONLINE SALES BOOM

Some of the smartphone companies – Xiaomi, Samsung, OnePlus, Realme and Motorola – have been ordered to submit their financial statements for three fiscal years up to 2024, certified by their auditor, to the CCI, according to an internal CCI document dated 28 August. , also seen by Reuters.

The investigation into Amazon, Flipkart and their sellers was triggered in 2020 by a complaint by an affiliate of the country’s largest retailer association, the Confederation of All India Traders, which has 80 million members.

The CCI will consider in the coming weeks any objections to its findings from Amazon, Flipkart, the retailer association and smartphone companies and could impose fines along with forcing the companies to change their business practices, people familiar with the matter said.

Indian retailers have repeatedly accused Amazon and Flipkart and smartphone companies of online exclusive phone launches, saying retailers suffered because they didn’t get the latest models and customers looked for them on websites. shopping.

“Exclusive launches have not only severely affected regular sellers on the platform, but also brick-and-mortar retailers who received mobile phones at a much later date,” both CCI reports said, citing analysis of data from smartphone companies.

Indian research firm Datum Intelligence estimates that 50 percent of phone sales were online last year, up from 14.5 percent in 2013. Flipkart had a 55 percent share of online phone sales in 2023, and Amazon 35 percent.