The Supreme Court ruled on Monday that antitrust investigations into business practices of Amazon.com Inc and Walmart's Flipkart must continue, in a setback for the two e-commerce giants who had urged the court to put them on hold.
The Competition Commission of India (CCI) ordered the investigation against the companies last year for allegedly promoting select sellers on their e-commerce platforms and using business practices that stifle competition.
The companies deny any wrongdoing and have mounted legal challenges in lower courts and at the Supreme Court against the investigation, saying the CCI did not have enough evidence to pursue the matter.
A three-judge Supreme Court bench, led by Chief Justice N.V. Ramana, said companies like Amazon and Flipkart should volunteer for such investigations.
"We expect organisations like Amazon and Flipkart, big organisations, they have to volunteer for inquiry and transparency. We expect that and you don’t even want (an) inquiry," Justice Ramana told the court.
"You have to submit and inquiry has to be conducted."
The decision is a major setback for both Amazon and Flipkart as the Supreme Court appeal was seen as the last legal recourse to block the CCI pressing on with its investigation.
The companies are also grappling with the prospects of tougher e-commerce regulations and investigations by the country's financial-crime agency for alleged violation of foreign investment laws.