NCLAT dismisses appeal against CCI nod for Walmart acquisition of Flipkart

In a society, competition in the market is essential to prevail so that there is economic growth and more choices are available to the consumers. For the growth of an economy, it is important that firms are able to enter into the market and trade, without any hindrances. In India, the Competition Commission of India (CCI) has been clothed with the duty of preserving competition in India and eliminating those activities which may have an appreciable adverse effect on competition (AAEC) and to promote and sustain healthy competition in the market.

In a recent order passed by the National Company Law Appellate Tribunal (NCLAT), a quasi-judicial body which has the appellate jurisdiction to review the judgments and orders passed by CCI, it dismissed a suit filed by the Confederation of All India Traders (CAIT) against a decision passed by CCI on 8th August 2018 which approved the acquisition of the Indian e-giant Flipkart by the global major Walmart, which holds a staggering 77% stake in the firm. The deal cost Walmart a whooping sum of $16 billion, respectively. CAIT, the traders’ body, argued that such acquisition falls under the purview of CCI under the Act[1] and that the global giant was indulging in anti-competitive practice of creating a monopoly by the virtue of its dominant position which it had abused[2].

CAIT had also contended that since Walmart would have absolute control over Flipkart, it would sell off the latter’s inventory and have effective control over the firm. Walmart raised the contention that CAIT did not have any locus standi to challenge the CCI order[3] which had come to a finding that CAIT did not have any evidence that the other competitors in this relevant market were getting affected or driven out of the competition. In order to prove anti-competitive behaviour, it is essential to prove the following elements-

  1. That the market (geographic or product) is a relevant market
  2. That the firm is dominant in that relevant market
  3. That the firm has abused its dominant position

Anti-trust violations are difficult to prove and therefore, this plea of appeal raised by CAIT was dismissed by a two-judge bench of the tribunal (NCLAT), headed by S.J. Mukhopadhaya. The bench held that they did not find any merit in the case and thus, the petition was dismissed accordingly[4].

[1] Section 5, The Competition Act, 2002.
[2] Section 4(1), The Competition Act, 2002.
[3] FE Bureau, NCLAT sets aside CAIT plea against CCI nod to Flipkart’s acquisition by Walmart, Financial Express, URL <> assessed on 17th Mar 2020.
[4] Press Trust of India, NCLAT sets aside CAIT plea against CCI nod to Walmart’s $16-billion acquisition of Flipkart, Firstpost, URL <> assessed on 17th Mar 2020.

Shreya Sahi

Shreya is a student of Symbiosis Law School- Pune and is in her first year of the five year BBA LLB Hons. course.
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