By India’s competition watchdog has accused major smartphone manufacturers, including Samsung and Xiaomi, of colluding with e-commerce giants Amazon and Walmart-owned Flipkart to exclusively launch products on their platforms, violating the country’s antitrust laws, according to regulatory reports seen by Reuters.
The Competition Commission of India (CCI) conducted extensive investigations into the business practices of Amazon and Flipkart, producing reports that run over 1,000 pages each. These reports allege that the e-commerce platforms violated local competition laws by giving preference to select sellers, prioritizing certain listings, and offering steep discounts that hurt other companies.
In a significant development, the CCI’s 1,027-page report on Amazon states that the Indian units of five smartphone companies – Samsung, Xiaomi, Motorola, Realme, and OnePlus – were “involved in the practice of exclusive” phone launches in “collusion” with Amazon and its affiliates. Similarly, the 1,696-page report on Flipkart implicates the Indian units of Samsung, Xiaomi, Motorola, Vivo, Lenovo, and Realme in comparable practices.
G.V. Siva Prasad, CCI’s additional director general, wrote in both reports, “Exclusivity in business is anathema. Not only is it against free and fair competition but also against the interest of consumers.”
The inclusion of major smartphone manufacturers in these allegations could significantly increase their legal and compliance challenges in India, one of the world’s largest and fastest-growing smartphone markets. Counterpoint Research data shows that Samsung and Xiaomi together hold nearly 36% of India’s smartphone market share, with Vivo capturing an additional 19%.
The CCI reports claim that both Amazon and Flipkart “deliberately downplayed” allegations of exclusive launches during the investigations. However, officials found the practice to be “rampant.”
This investigation, triggered in 2020 by a complaint from an affiliate of the Confederation of All India Traders, could have far-reaching implications for India’s booming e-retail market, which Bain consultancy estimates will exceed $160 billion by 2028.
The CCI has ordered some of the implicated smartphone companies, including Xiaomi, Samsung, OnePlus, Realme, and Motorola, to submit their audited financial statements for three fiscal years to 2024.
Indian retailers have long accused these e-commerce platforms and smartphone companies of exclusive online launches, arguing that such practices severely affect both ordinary online sellers and brick-and-mortar retailers.
The shift towards online smartphone sales in India has been dramatic, with Datum Intelligence estimating that 50% of phone sales occurred online last year, up from just 14.5% in 2013. Flipkart reportedly held a 55% share in online phone sales in 2023, with Amazon at 35%.
As the CCI prepares to review objections to its findings from the involved companies and potentially impose fines or mandate changes in business practices, this case highlights the growing tensions between traditional retail, e-commerce giants, and global smartphone manufacturers in India’s rapidly evolving digital marketplace.
The accused companies have not yet publicly responded to these allegations. The CCI’s final decisions in this matter could significantly reshape the landscape of smartphone sales and e-commerce practices in India.
REUTERS
