India’s Competition Commission (CCI) has found that Amazon and Flipkart, a Walmart subsidiary, violated local antitrust laws by favoring select sellers on their platforms.

This outcome follows a CCI investigation initiated in 2020 after complaints that both companies provided preferential treatment to specific sellers, marginalizing smaller competitors.

The findings are detailed in two reports: one for Amazon spanning 1,027 pages and another for Flipkart at 1,696 pages. The reports reveal both companies created mechanisms that allowed favored sellers to secure prominent visibility in search results, hindering competitiveness from other retailers.

The CCI noted that “each of the anti-competitive practices alleged … were investigated and found to be true,” emphasizing that smaller sellers were effectively marginalized on these platforms.

The investigation followed a complaint from the Delhi Vyapar Mahasangh, which represents millions of retailers nationwide. The trade body supports the CCI’s findings and plans to present them to the federal government.

As significant players in India’s booming e-retail market, worth $57 billion to $60 billion in 2023 and projected to exceed $160 billion by 2028, Amazon and Flipkart face increased scrutiny. Furthermore, the CCI report highlighted aggressive discounting strategies by both companies that could harm market competition.

The legal challenges from the investigation created hurdles for both companies; however, the Supreme Court of India allowed the inquiry to proceed in 2021. In reaction, representatives from Amazon and Flipkart denied any wrongdoing under Indian law.

Regardless of the legal implications, Amazon plans to increase its investment in India to $26 billion by 2030, aiming to facilitate $20 billion in merchandise exports from the country by 2025.