Please ensure Javascript is enabled for purposes of website accessibility

Walmart's Flipkart Faces Antitrust Probe in India

By Danny Vena - Mar 5, 2020 at 2:16PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

After previously being cleared of wrongdoing, new allegations emerge against the e-commerce platform.

Flipkart, the e-commerce platform controlled by Walmart (WMT -0.02%), is facing yet another antitrust investigation in India. The All India Online Vendors Association filed an appeal with the National Company Law Appellate Tribunal (NCLAT), asking the regulatory body to investigate Flipkart amid allegations of unfair business practices related to its dominant market position. The NCLAT has turned the matter over to the director general -- India's anti-competitive watchdog --saying that the regulator "is directed to initiate [a] probe against Flipkart." 

The Competition Commission of India (CCI) had investigated similar accusations in 2018 and found that neither Flipkart nor Amazon (AMZN 0.73%) had violated antitrust regulations. This latest decision by the NCLAT overturns that decision.

An antitrust law book on a desk with a gavel.

Image source: Getty Images.

The complaint alleges that Flipkart favors certain small vendors that sell on its platform, "promoting" their products over others. It also accuses the company of selling products at a loss, ultimately driving its smaller e-commerce rivals out of business, while discriminating against other small vendors. 

The CCI ordered new investigations into both Flipkart and Amazon back in January, based on allegations by a trade group that the tech companies violated competition laws and ran afoul of regulations due to the pairs use of heavy discounts to attract customers. Amazon filed a legal challenge early last month asking courts in India to quash the probe, saying it would damage the company's reputation and cause it "irreparable" loss. 

An Indian court temporarily stayed the investigation while it determines whether the probe should have been launched at all. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Wal-Mart Stores, Inc. Stock Quote
Wal-Mart Stores, Inc.
WMT
$125.10 (-0.02%) $0.03
Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$114.33 (0.73%) $0.83

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
322%
 
S&P 500 Returns
113%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/07/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.