In a significant development, Praveen Khandelwal, Member of Parliament from the ruling Bhartiya Janata Party (BJP), has written to the Commerce and Industry Minister Piyush Goyal, urging prompt action by the government against e-commerce giants Flipkart and Amazon for their anti-trust breaches.

This follows a detailed investigation by the Competition Commission of India (CCI), which has reportedly exposed a range of anti-competitive practices of these e-commerce giants that have severely impacted domestic traders and undermined fair competition in India’s e-commerce landscape.

CCI’s findings—investigation reports yet to be made public—reportedly reveal that Flipkart and Amazon have consistently provided preferential treatment to select sellers, engaged in deep discounting, and entered into collusive arrangements with leading smartphone brands such as Xiaomi, Samsung, Realme, Motorola, Vivo and OnePlus. These activities have led to a substantial distortion of competition, particularly in the retail market for smartphones, and are seen as clear violations of India’s Competition Act.

Khandelwal’s letter points out that Walmart’s stake in Flipkart has also come under scrutiny as part of the investigation, with concerns being raised about how the company’s business strategies may have violated India’s Foreign Direct Investment (FDI) regulations. Similarly, Amazon’s wholesale arm and its proxy sellers, Cloudtail and Appario, have been accused of engaging in practices that have contributed to market dominance and raised serious concerns about compliance with FDI norms.

The report is understood to have highlighted that Flipkart and Amazon have caused significant harm to small and medium-sized sellers by distorting market competition. By favoring a select group of vendors, these platforms have tilted the market in their favor, making it nearly impossible for others to compete on a level playing field. 

Additionally, complaints from trade bodies, including the Confederation of All India Traders (CAIT) and the Delhi Vyapar Mahasangh, have brought to light violations of India’s competition laws. These complaints have led to the CCI’s investigation, which uncovered further evidence of the platforms’ anti-competitive practices.

Rather than functioning as neutral marketplaces, both Flipkart and Amazon have been found to heavily favour specific sellers. These companies have struck exclusive deals with smartphone brands and offered their products at significantly discounted prices, particularly during major sales events, which has pushed smaller sellers out of the market. This has resulted in the consolidation of market power in the hands of a few players, limiting consumer choice and threatening to drive up prices in the long term.

Khandelwal, in his letter, called for immediate government intervention to address these issues. He recommended the immediate implementation of e-commerce rules under the Consumer Protection Act, urging the government to take strong measures against the platforms. He also suggested the suspension of operations for both Flipkart and Amazon until they are brought into compliance with the law. Khandelwal emphasized the need to curb major sales events such as “festival sales,” which have further distorted the market and caused harm to smaller sellers.

He urged the government to take legal action against the implicated brands and platforms to restore fair competition in India’s rapidly growing e-commerce market.

Khandelwal’s letter is likely to prompt further scrutiny from the Ministry of Commerce and Industry. As the government assesses the situation, all eyes will be on the steps it takes to ensure that the country’s e-commerce sector remains competitive and transparent, allowing small traders to thrive alongside global giants like Flipkart and Amazon, economy watchers said. 

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