According to recent reports seen by Reuters, smartphone manufacturers like Samsung, Xiaomi, and others allegedly colluded with Amazon and Walmart’s Flipkart to launch products exclusively on these e-commerce platforms in violation of antitrust laws. The Competition Commission of India (CCI) has found that Amazon and Flipkart breached local competition laws by favoring specific sellers, prioritizing certain listings, and offering deep discounts, which negatively impacted other companies.
The CCI’s extensive investigation revealed that the Indian branches of Samsung, Xiaomi, Motorola, Realme, and OnePlus engaged in exclusive phone launches in collusion with Amazon and its affiliates, breaching competition regulations. Similarly, the CCI’s findings on Flipkart indicate that Samsung, Xiaomi, Motorola, Vivo, Lenovo, and Realme engaged in comparable practices.
These findings could pose significant legal and compliance challenges for the involved smartphone manufacturers. The CCI’s additional director general, G.V. Siva Prasad, criticized the exclusivity practices, stating they undermine fair competition and consumer interests.
The CCI’s reports, dated August 9 and not yet public, suggest that Amazon and Flipkart minimized the issue of exclusive launches, although the practice was widespread. The inclusion of major players like Samsung and Xiaomi in the investigation could intensify their legal troubles.
With Samsung and Xiaomi together controlling nearly 36% of India’s smartphone market, and Vivo at 19%, these findings are a considerable setback for Amazon and Flipkart. The CCI’s investigation, which began in 2020 following a complaint from the Confederation of All India Traders, also uncovered that Amazon and Flipkart used foreign investments to offer subsidized services to select sellers.Smartphone companies including Xiaomi, Samsung, OnePlus, Realme, and Motorola have been directed to submit audited financial statements for the past three fiscal years to the CCI. The CCI is expected to review any objections to its findings and may impose fines and mandate changes to business practices.
The investigation highlights how exclusive online launches have affected traditional retailers, who faced delays in receiving new models while online platforms enjoyed preferential access. Online sales of phones have surged, with online sales accounting for 50% of phone sales last year, up from 14.5% in 2013. Flipkart and Amazon held a combined 90% share of online phone sales in 2023.