Sellers’ body approaches CCI against Flipkart’s Walmart India acquisition

Flipkart's recent acquisition of Walmart India (cash-and-carry business) seems to have already run into trouble, as the All India Online Vendors' Association (AIOVA) has approached the Competition Commission of India (CCI) against the move.

Sellers’ body AIOVA has said that an investigation by the CCI against Flipkart is currently underway for abuse of dominant position, and hence the acquisition can’t be allowed.

Flipkart last week announced its acquisition of Walmart India's cash-and-carry business, which it runs under the Best Price brand across 28 stores in the country. With the acquisition, Flipkart is also set to launch a digital wholesale marketplace under the brand Flipkart Wholesale.

Flipkart said Walmart India has 1.5 million members. The NCLAT in March had asked CCI to investigate allegations against Flipkart after setting aside the competition watchdog’s order of 2018 that had given a clean chit to Flipkart on allegations by AIOVA.

In a letter to CCI sent on Monday, AIOVA has alleged that the acquisition of Walmart India will lead to preferential treatment for a few sellers.

The association also claims the combination will lead to deep discounting by Flipkart in its grocery segment.

"When Flipkart was acquired by Walmart, we had raised objections to certain parts of the deal in sellers' interests. Over the years it has been seen that sellers have been neglected by them. Among the objections raised then, we had raised an alarm over Walmart's existing operations being merged with Flipkarts operations, which is detrimential to sellers interests," a spokesperson of AIOVA said.

Flipkart is yet to respond CNBC TV 18's queries. AIOVA had in 2018 sought investigation against Flipkart on alleged violation of Section 4 of Competition Act on abuse of dominance, but it was quashed by the CCI. The NCLAT in March reversed that order, asking the commission to investigate Flipkart.

The CCI had in a separate January 13 order commissioned a probe against Amazon and Flipkart on alleged anti-competitive practices

That CCI probe has been temporarily stayed by the Karnataka High Court.