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India to investigate Flipkart, Amazon over smartphone sales

India's antitrust regulator on Jan. 13 announced that it will conduct an investigation into whether Walmart Inc.'s Flipkart India Private Ltd. and Amazon.com Inc. stifle competition in the online market for smartphones in India.

In a statement, the Competition Commission of India, or CCI, said it would examine the relationships between the U.S.-owned online marketplaces and their preferred sellers. The complaint alleged that the two companies, directly or indirectly, control many of the preferred sellers on the platforms of Flipkart and Amazon.

The investigation arises from a complaint to the Indian competition watchdog by Delhi Vyapar Mahasangh, a New Delhi-based traders organization that represents micro, small and medium-sized enterprises, many of which rely on the trade of smartphones and related accessories.

It alleged that Flipkart and Amazon create bias with preferential listings, offer deep discounting and exclusive tie-ups as well as private labels. Several smartphone manufacturers had conducted exclusive launches on Flipkart and Amazon, the complaint said.

Nonpreferred sellers are relegated to sell only through traditional brick-and-mortar channels that involve significant fixed costs and are "devoid of wide pan-India reach" offered by online marketplaces, the complaint said.

The regulator cited figures that said Flipkart and Amazon together account for almost 90% of the online market for smartphones.

An Amazon spokesperson said: "We welcome the opportunity to address allegations made about Amazon; we are confident in our compliance, and will cooperate fully with CCI."

Flipkart did not immediately respond to an emailed request for comment from S&P Global Market Intelligence.

The CCI has 60 days from receipt of an order to carry out its investigation.