CCI uncovers alleged collusion between Samsung, Xiaomi and other smartphone makers and Amazon and Flipkart: Report

Samsung, Xiaomi and other smartphone companies colluded with Amazon and Walmart’s Flipkart to launch products exclusively on the e-commerce companies’ Indian websites, thereby violating the antitrust laws, according to regulatory filings seen by Reuters.

Antitrust investigations conducted by the Competition Commission of India (CCI) found that Amazon and Flipkart violated local competition laws by giving preference to select sellers, prioritizing certain listings and offering deep discounts on products, harming other companies, Reuters reported this week.

The ICC’s 1,027-page report on Amazon It also said Indian units of five companies – Samsung, Xiaomi, Motorola, Realme and OnePlus – were “engaged in the practice of exclusive launches” of phones in “collusion” with Amazon and its affiliates, violating competition law.

In the case of Flipkart, a 1,696-page CCI report said that the Indian units of SamsungXiaomi, Motorola, Vivo, Lenovo and Realme have carried out similar practices.

The inclusion of smartphone manufacturers such as Samsung and Xiaomi in the case could increase their legal and compliance headaches.

“Exclusivity in business is anathema. It is not only against free and fair competition but also against the interests of consumers,” CCI Deputy Director General GV Siva Prasad wrote in Amazon and Flipkart reports, with identical findings.

Reuters is the first to report that smartphone companies have been accused of anti-competitive behavior in the ICC reports, which are dated August 9 and are not public.

Xiaomi declined to comment, while the other smartphone The manufacturers did not respond to requests for comment.

Amazon, Flipkart and the CCI did not respond and have not yet commented on the findings of the reports.

Both CCI reports claim that during investigations, Amazon and Flipkart “deliberately reinstated” claims of exclusive launches, but officials found the practice to be “rampant.”

Counterpoint Research data shows that South Korea’s Samsung and China’s Xiaomi are two of the top players in India’s smartphone market, together holding a market share of nearly 36%, with China Alive 19%.

India’s e-retail market is estimated to surpass $160 billion by 2028, up from $57-60 billion in 2023, according to consultancy Bain.

The findings of the investigation are a major setback for Amazon and Flipkart in a key growth market where they have faced the ire of small retailers for years for hurting their offline businesses.

The CCI also alleged that both companies used their foreign investments to offer subsidized rates for services such as warehousing and marketing to a select number of sellers.

Rise of online sales

Some of the smartphone companies: Xiaomi, Samsung, OnePlusRealme and Motorola have been ordered to submit their financial statements for three fiscal years to 2024, certified by their auditor, to the CCI, according to an internal CCI document dated Aug. 28, also seen by Reuters.

The investigation into Amazon, Flipkart and their sellers was triggered in 2020 by a complaint from an affiliate of the country’s largest retail association, the All India Traders Confederation, which has 80 million members.

The ICC will review any objections to its findings in the coming weeks. AmazonFlipkart, the association of retailers and smartphone companies, and could potentially impose fines in addition to forcing the companies to change their business practices, people familiar with the matter said.

Indian retailers have repeatedly accused Amazon and Flipkart, and smartphone companies, of exclusivity. phone is launching online, saying retailers suffered because they could not get the latest models and customers sought them out on shopping websites.

“The exclusive launches not only severely affected the platform’s regular sellers but also traditional retailers who were provided with handsets at a much later date,” both CCI reports said, citing data analysis from smartphone companies.

Indian research firm Datum Intelligence estimates that 50% of phone Sales were made online last year, up from 14.5% in 2013. Flipkart had a 55% share of online phone sales in 2023 and Amazon 35%.

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