The Karnataka high court has dismissed a petition by Amazon India and Flipkart that sought to quash an investigation by the Competition Commission of India, the country’s antitrust regulator, into their business practices.

Justice PS Dinesh Kumar dismissed the petition on Friday, clearing the way for

to restart its investigation into the e-commerce companies. A senior counsel for Flipkart sought an extension of the interim stay on the CCI probe for another two weeks but the court rejected this. Sources said it was likely that both Flipkart and Amazon India would once again challenge this order.

CCI had ordered a probe against the two firms last January, saying it had ‘prima facie’ evidence to begin an investigation under Section 26 (1) of the Competition Act, 2002. This followed allegations from trade bodies such as Confederation of All India Traders (CAIT) and Delhi Vyapar Mahasangh (DVM) that the e-tailers were offering deep discounts to customers and favourable terms to select sellers. The probe was ordered just days before Amazon CEO Jeff Bezos landed in India on a business trip.

The two companies then
moved the Karnataka High Court, which granted an interim stay on the probe last February. CCI moved the Supreme Court but was referred back to the Karnataka High Court, which heard the matter again before passing the order on Friday.

CAIT said it welcomed the decision. “[The court ruling] fully vindicates the stand of CAIT — that Amazon’s and Flipkart’s business model is entirely based on violating the FDI policy, rules and other laws. CCI should begin its probe immediately,” said Praveen Khandelwal, secretary general of CAIT.

“We will review the judgement carefully and decide on the next steps,” a spokesperson for Amazon India said in an emailed statement.


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