MUMBAI: The Forum for Internet Retailers, Sellers and Traders (FIRST) has dragged Walmart-owned Flipkart Group to the Competition Commission of India (CCI), seeking a fresh probe into the company’s conduct over practices designed to distort competition, benefit a few favored sellers and drive many small retailers out of the market system.In its 157-page complaint filed with the CCI on July 2, FIRST alleged that Flipkart has established a structural and operational mechanism to distort competition by facilitating and maintaining deep discounts across product categories at a market-wide level. FIRST also alleged that the group generated a “self-replenishing stock of funds” of approximately Rs 3,000 crore annually through reduction or avoidance of GST liabilities related to its logistics and fulfillment operations, which it used to maintain “exclusionary pricing conduct”.“TOI has a copy of the complaint. First India is an associate of the SME Forum. Flipkart did not respond to any queries.
“This subsidy pool is deployed in the form of incentives, rebates and discounts through the ecosystem of preferred sellers…ultimately reflected in low retail prices that independent sellers cannot compete with without incurring significant losses or being forced out of business,” First alleged. This has created a new problem for Flipkart, which is preparing for public listing in the local stock exchanges.