In a major revelation that could have wide-reaching implications, antitrust investigations led by the Competition Commission of India (CCI) have unveiled a concerning pattern of behavior involving some of the world’s biggest smartphone manufacturers like Samsung and Xiaomi.
Regulatory reports seen by Reuters reveal that companies such as Samsung, Xiaomi, Motorola, Realme, and OnePlus engaged in collusive practices with e-commerce giants Amazon and Flipkart to launch smartphones exclusively on these platforms. This behavior, as identified by the CCI, violates India’s competition laws and further intensifies the scrutiny already surrounding these companies.
Breach of Antitrust Laws
According to the detailed reports by the CCI—spanning over 1,000 pages for Amazon and close to 1,700 for Flipkart—the companies were involved in strategies that hurt fair market competition. Both Amazon and Flipkart are accused of favoring select sellers by giving them special listings, steep discounts, and other incentives, which harmed smaller businesses and brick-and-mortar retailers.
The CCI found these practices to be rampant across the board, with particular focus on exclusive product launches of smartphones on these e-commerce platforms.
Samsung & Xiaomi: Smartphone Giants Involved in Collusion
The reports highlight that Samsung and Xiaomi, alongside other major smartphone players like Motorola and Realme, were deeply involved in these exclusive launches. These companies launched new phones through Amazon and Flipkart in such a way that physical retailers were either left out of the loop or had delayed access to the latest models. This created an uneven playing field, where consumers flocked to online platforms, undermining traditional retail businesses.
“The practice of exclusivity in business is not only detrimental to competition but also goes against the interests of consumers,” wrote G.V. Siva Prasad, the CCI’s Additional Director General, in his findings. These strong words reflect the gravity of the situation, as the inclusion of Samsung and Xiaomi could intensify their legal and compliance issues in India, one of the fastest-growing e-commerce markets in the world.
Rampant Exclusivity and Anticompetitive Practices
Despite the denials from Amazon and Flipkart during the investigation, the CCI concluded that the practice of exclusive product launches was rampant and deliberate. These findings further expose the e-commerce giants’ efforts to dominate the Indian market through selective collaborations with top smartphone brands.
While Xiaomi declined to comment on the findings, Samsung and other smartphone manufacturers have remained silent on the issue. Neither Amazon, Flipkart, nor the CCI has issued public statements in response to the reports, although legal challenges are expected in the coming months.
Implications for India’s Retail Market
India’s e-retail market is on a rapid growth trajectory, set to exceed $160 billion by 2028 from around $60 billion in 2023, according to Bain & Company. The revelations of antitrust violations could have far-reaching consequences not only for Amazon and Flipkart but also for smartphone companies like Samsung and Xiaomi, which hold a combined 36% share of India’s smartphone market. Chinese smartphone brand Vivo, with a 19% market share, has also been named in the Flipkart report.
Indian retailers have long accused e-commerce giants of undercutting their businesses by offering exclusive deals and heavy discounts that local stores simply cannot compete with. The latest CCI findings echo these concerns, revealing that brick-and-mortar retailers were deprived of the latest smartphones while online platforms benefited from early and exclusive access to product launches.
Next Steps for the Investigation
The CCI has ordered several smartphone companies, including Samsung and Xiaomi, to submit their financial statements for review as part of the ongoing investigation. These companies will need to provide records for three fiscal years, up to 2024, certified by auditors. This step is seen as crucial in determining the extent of financial gains made from these exclusive deals.
The investigation, which began in 2020 following a complaint from the Confederation of All India Traders (CAIT), could lead to significant penalties. With 80 million members, CAIT has been a vocal critic of Amazon and Flipkart’s business practices, accusing the e-commerce platforms of systematically harming small and medium-sized retailers across India.
Both Amazon and Flipkart have previously faced regulatory challenges in India, and this latest investigation further complicates their efforts to navigate one of the world’s most lucrative e-commerce markets. The CCI is expected to review objections from all parties involved in the coming weeks, which could result in fines and new business regulations to ensure fair competition.
The Future of Smartphone Sales in India
As online shopping continues to grow, exclusive deals and discounts have become a popular strategy for e-commerce platforms to attract customers. According to Datum Intelligence, online sales accounted for 50% of smartphone sales in 2023, up from just 14.5% a decade ago. Flipkart held a 55% share of online phone sales, with Amazon claiming 35%.
Also Read:Indian Racer Kush Maini Involved in Major Crash at Azerbaijan Grand Prix