The antitrust regulator of India has been approached by an Indian trader body with serious reservations against the acquisition of the largest e-commerce website in India – Flipkart, by Walmart Inc’s for a deal worth $16 billion. However, lawyers and sources have said that the complaint is not likely to cause any serious problem for the deal.
Alleging that the acquisition of 77 per cent of stocks of the Bengaluru-based Flipkart by the U.S. retail giant would result in potential unfair trade competition as well as predatory pricing, the deal has been opposed by the Confederation of All India Traders (CAIT) in their written objection file with the anti-trust regulator of India.
However, according to a number of lawyers and sources quoted in the local media, the opposition filed with the Competition Commission of India (CCI) by the CAIT against the deal will not be a significant challenge for the takeover.
“It’s very unlikely the CCI will look into this complaint as both Flipkart and Walmart are not competing in India in relation to any products or services,” a lawyer with knowledge of the deal reportedly told the media.
The CAIT complaint was “not a matter of concern”, a source with direct knowledge of the deal told the media.
The deal for the takeover by Walmart is an attempt by the U.S. retailer to pose a challenge to Amazon in one of the fastest growing online markets in the world. this deal has already seen Indian trade and nationalist groups protesting against the deal alleging that the small traders would be disadvantaged by the deal.
According to a CCI official who was quote din the local media, the fears of unfair competition is not warranted because of the presence of Amazon in the market as a competition to the Walmart-Flipkart combination. But the acquisition can be a sensitive issue politically since the it is perceived that the small and medium-sized traders could be affected by the deal, according to the CCI official who was quoted in the media and who did not want to be named because he is not authorized to speak to the media.
“Blocking (of the deal) is highly unlikely, but the CCI will keep checks and balances so that competition in the market is maintained,” said M. M. Sharma, head of competition law and policy at law firm Vaish Associates.
(Source:www.reuters.com)
Alleging that the acquisition of 77 per cent of stocks of the Bengaluru-based Flipkart by the U.S. retail giant would result in potential unfair trade competition as well as predatory pricing, the deal has been opposed by the Confederation of All India Traders (CAIT) in their written objection file with the anti-trust regulator of India.
However, according to a number of lawyers and sources quoted in the local media, the opposition filed with the Competition Commission of India (CCI) by the CAIT against the deal will not be a significant challenge for the takeover.
“It’s very unlikely the CCI will look into this complaint as both Flipkart and Walmart are not competing in India in relation to any products or services,” a lawyer with knowledge of the deal reportedly told the media.
The CAIT complaint was “not a matter of concern”, a source with direct knowledge of the deal told the media.
The deal for the takeover by Walmart is an attempt by the U.S. retailer to pose a challenge to Amazon in one of the fastest growing online markets in the world. this deal has already seen Indian trade and nationalist groups protesting against the deal alleging that the small traders would be disadvantaged by the deal.
According to a CCI official who was quote din the local media, the fears of unfair competition is not warranted because of the presence of Amazon in the market as a competition to the Walmart-Flipkart combination. But the acquisition can be a sensitive issue politically since the it is perceived that the small and medium-sized traders could be affected by the deal, according to the CCI official who was quoted in the media and who did not want to be named because he is not authorized to speak to the media.
“Blocking (of the deal) is highly unlikely, but the CCI will keep checks and balances so that competition in the market is maintained,” said M. M. Sharma, head of competition law and policy at law firm Vaish Associates.
(Source:www.reuters.com)
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