Mobile handset firms caught up in Indian ecommerce scandal

We know this thanks to the exclusive access Reuters got to investigations by the Competition Commission of India (CCI) into Amazon and Walmart-owned Flipkart. Following its initial report late last week, Reuters followed up by revealing that Samsung, Xiaomi, Motorola, Realme, and OnePlus have been identified as part of the Amazon probe, while Samsung, Xiaomi, Motorola, Realme, Vivo, and Lenovo are singled out for similar acts in collusion with Flipkart.

The allegedly illegal acts revolve around the phone brands being given preferential treatment on those ecommerce platforms. The CCI doesn’t seem to have published anything yet, but Reuters reports that ‘CCI in 2020 ordered an investigation into Amazon and Flipkart for allegedly promoting certain sellers with which they had business arrangements and giving priority to certain listings.’

It’s common practice for Amazon to place sponsored results at the top of search listings, so either something more substantial than that took place in India or the country’s competition rules are stricter than over here. The political dimension to this is that lots of smaller, domestic retailers feel they’re being unfairly treated by this practice, with exclusive launches on the sites of certain handsets a further grievance.

The fact that handset vendors seem to have been singled out in these investigations is interesting. The Indian mobile industry has boomed in the last decade and the handset market is one of the biggest in the world. So there’s a lot of money to be made from dominating it. Reuters notes that half of all Indian phone sales were online last year and that Amazon and Flipkart between them accounted for 90% of those sales.