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Update: Traders association moves to CCI objecting Walmart-Flipkart deal

Update: After CAIT, the All India Online Vendors Association (AIOVA) has now reached out to Competition Commission of India (CCI) about the Walmart-Flipkart deal and has reportedly written in its petetion that Walmart has considered B2B market as the relevant market in India, and that after the completion of the deal, the US giant will dominate the market on Flipkart.com via B2B company, which will affect other sellers on the Flipkart and may also lead to shutdown of their businesses.

Earlier on 28th May 2018: Traders body Confederation of Indian Traders (CAIT) has filed a petition with the Competition Commission of India (CCI) as an objection against the $16 billion Walmart-Flipkart deal. The petition was filed by CAIT Advocate Abir Roy.

CAIT represents 7 crore traders across India. In a statement, CAIT said that it has objected the merger of two companies in the petition and said that Walmart will create an unfair competition, uneven level playing field and will indulge in predatory pricing, deep discounts and loss funding.

According to the statement, CAIT has written the following to  anti-competition watchdog:

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Flipkart is a combination of predation, exclusive tie-ups and of preferential sellers where even online vendors face discriminatory conditions and Walmart being the owner by virtue of 77% share is bound to give preference to its inventory. There will be a denial of market access to traders or non-preferred sellers.

Walmart would sell its inventory on the platform of Flipkart.com either directly or through a web of associated preferred sellers with the result that their market share would rise exponentially and pure offline retailers / wholesalers would have two options either exit the market or sell their goods on flipkart.com and face discriminatory terms and conditions from flipkart.com in comparison to its preferred sellers. This will create an unhealthy competition much to the disadvantage of both offline and online sellers.

It was also submitted that access to vast resources of data to be used for targeted advertisements for consumers as also creating private label and sell the same through preferred sellers.This transaction would result in vertical integration which no other player in India would have. The combined entity would have affiliates in the entire supply chain. The Complainant apprehends that the deal is bound to circumvent established laws and FDI policy of the government since the ultimate object of Walmart is to enter the retail trade of the country and in the absence of any policy on e-commerce or retail trade, it would be easy for Walmart to reach out to retail market, which otherwise it cannot enter due to FDI policy.

Ongoing battle

Along with CAIT, other online trader associations including The All India Online Vendors Association (AIOVA), Swadeshi Jagran Manch are not in favour of the $16 billion deal as this could affect sellers’ business.  Besides that, there is an ongoing battle between e-tailers and retailers. Offline retail players and bodies have continuously notified about the malpractices or unfair practices like FDI violations, heavy discounts, not maintaining level playing field etc of e-commerce players.

Earlier, AIOVA filed a petition with the Competition Commission of India (CCI) against Flipkart for abusing its dominant position in e-commerce. AIOVA represents about 3,500 sellers present on various e-commerce platforms like Flipkart, Amazon and Snapdeal.

Update: We had updated the copy with the latest development regarding traders showing objection to Walmart-Flipkart deal.

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