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Traders' body wants court to investigate Flipkart's business model

The trade body, which represents 70 million small businesses, had filed a complaint against the ‘malpractices’ of Flipkart with the ED a few months ago.

ET Bureau|
Aug 31, 2018, 08.18 AM IST
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About 10 lakh traders had protested in July against the Walmart-Flipkart deal.
BENGALURU: The Confederation of All India Traders (CAIT) has filed a writ petition in the Delhi High Court to investigate the business model of online retailer Flipkart. The trade body which represents 70 million small businesses, had filed a complaint against the ‘malpractices’ of Flipkart with the enforcement directorate (ED) a few months ago, but to no avail.

“Flipkart has consistently acted in violation of the rule where no seller on one platform can make sales more than 25% of the overall sales by ensuring that close to 80% of the sales on its platform comes through its preferred sellers,” said Praveen Khandelwal, national secretary general at CAIT. “We have filed a petition asking the court to intervene and direct the ED to start an investigation into the allegations we have revealed.”

This comes just a few days after the trade body petitioned the National Company Law Appellate Tribunal (NCLAT) against the approval given for the Walmart-Flipkart deal by the Competition Commission of India.

Flipkart did not immediately respond to ET’s email seeking comments.

The retail and trader groups believe that Flipkart has been indulging in predatory pricing and deep discounting for a while and it will only get worse now that the Walmart-Flipkart deal has been sealed.

About 10 lakh traders had protested in July against the Walmart-Flipkart deal. The CAIT also filed a petition during the end of May with the antitrust regulator, objecting to the Walmart-Flipkart deal, citing the reason that such a merger would lead to predatory pricing, deep discounts, among others.

Prior to this, the All India Online Vendors Association (AIOVA), which represents over 3,000 online sellers, filed a petition with the CCI against Flipkart for giving ‘preferential treatment’ to a few seller entities and thus enabling steep discounts on its platform.

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