The Confederation of All India Traders on Monday filed a plea with the Competition Commission of India against multinational retailer Walmart’s plan to buy out Indian e-commerce firm Flipkart. The traders’ body said that Walmart, the world’s largest retailer, would create unfair competition and an uneven playing field, ANI reported.
On May 9, Walmart had acquired 77% stake in Flipkart for nearly $16 billion (Rs 1.07 lakh crore). Flipkart’s existing shareholders, including Flipkart co-founder Binny Bansal, Tencent Holdings Limited, Tiger Global Management LLC and Microsoft Corp will hold the remainder of the business, the American retailer said in a statement. The deal values Flipkart at $20.8 billion (Rs 1.39 lakh crore).
“The petition further said that Flipkart is a combination of predation, exclusive tie-ups and of preferential sellers, where even online vendors face discriminatory conditions,” the Confederation of All India Traders said according to The Financial Express. “Walmart being the owner by virtue of a 77% stake [in Flipkart] is bound to give preference to its inventory.”
The traders’ body said the Walmart-Flipkart deal will destroy small traders who work offline, as well as other online competition. It also claimed that the agreement had circumvented the existing laws and the government’s policy on Foreign Direct Investment. “The ultimate object of Walmart is to enter the retail trade of the country, which it otherwise cannot enter due to the FDI policy,” the Confederation of All India Traders added.
In a letter to Union Commerce and Industry Minister Suresh Prabhu on Friday, the confederation had called Walmart “the United States version of the East India Company” and called for a thorough investigation into the retailer’s deal with Flipkart, PTI reported.
“It is highly regretted that some people, merely for profit, have sold a major chunk of e-commerce to Walmart,” the traders’ body said.