Online sellers on Walmart's Flipkart sue India watchdog over antitrust probe

Three online sellers operating on Walmart-owned Flipkart have sued the Indian antitrust watchdog over an investigation which found they, Flipkart and rival Amazon breached competition laws, according to court filings seen by Reuters.

The filings come after antitrust investigations concluded in August found Amazon and Flipkart, some of their sellers and smartphone brands, violated local competition laws by giving undue preference to select online sellers and prioritizing certain listings, Reuters has reported.

Flipkart is one of India's biggest ecommerce players and rivals Amazon.

In an effort to quash the critical proceedings, the three sellers on the platform made submissions in the High Court of Karnataka to "set aside" the investigation report and put the process of the Competition Commission of India (CCI) on hold.

Lawsuits from sellers of Amazon and Flipkart can potentially delay the investigation process which first started in 2020, and was triggered after brick-and-mortar retailers of the Confederation of All India Traders complained to the watchdog. Amazon and Flipkart deny any wrongdoing.

Three of Flipkart sellers - CIGFIL Retail, Wishery Online, Xonique Ventures - in their lawsuits argue that during the investigation they were called to submit data to help officials, but were later named as accused, which is against due process, court papers show.

"The alleged investigation ... is arbitrary, opaque, unfair," the sellers argued in three separate court filings, which will come up for hearing likely next week.

Flipkart and the CCI did not immediately respond to a request for comment. Reuters could not immediately reach the three sellers, whose filings are being reported for the first time.

Last week, a former Amazon seller also sued the CCI and obtained an interim injunction to block the investigation from proceeding. Its court filing - which Reuters has seen - argued the CCI did not give notice before making it an accused in the case.