ED and CCI Take Up Complaint of CAIT against Amazon and Flipkart

[MoC&I Press Release/12.02.2021]

Considering the cross-cutting nature of e-Commerce, different laws and regulations across sectors govern the present e-Commerce activities, some of which are; Consumer Protection Act, 2019, Finance Act 2020, Information Technology Act, 2000, Foreign Exchange Management Act, 2000 and Competition Act, 2002. In terms of providing a regulatory framework, the Competition Act, 2002, provides for preventing practices, which may have an adverse effect on competition. Provisions under Section 3, regarding anti-competitive agreements and Section 4 regarding abuse of dominant position are also applicable for e-commerce platforms. E-Commerce entities/platforms with Foreign Direct Investment (FDI) are presently regulated by Press Note 2(2018) read with SI No. 15.2, Schedule 1, of the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019.

The Government is in receipt of the representations submitted by Confederation of All India Traders (CAIT) against e-commerce companies. Under the Foreign Exchange Management Act, 1999, the investigative powers are vested with Enforcement Directorate (ED), and therein representations were duly forwarded to ED, which has taken up the matter for investigation. Further, complaints received from CAIT, alleging biased practice adopted by banks in providing cash backs and discounts for purchases made through e-commerce websites, such as Amazon and Flipkart, is being examined by Competition Commission of India, as well.

No investigation has been initiated by RBI or Enforcement Directorate on the allegation of violation of Foreign Direct Investment (FDI) policy and FEMA in the deal between Flipkart and Aditya Birla Fashion and Retail.

This information was given by the Minister of State in the Ministry of Commerce and Industry, Som Parkash, in a written reply in the Rajya Sabha on 12 February 2021.