The Flipkart-Walmart Deal in India: A Look into Competition and Other Related Issues

Date01 March 2019
DOI10.1177/0003603X18823619
Published date01 March 2019
Subject MatterArticles
Article
The Flipkart-Walmart Deal in
India: A Look into Competition
and Other Related Issues
Beena Saraswathy*
Abstract
The Competition Commission of India approved India’s highest-valued acquisition, Flipkart by Wal-
mart, within the first phase of investigation itself, stating that it is “not likely to have an appreciable
adverse effect on competition in India.” Unlike many other retail acquisitions, there has been strong
protest from the traders and retailers’ organization to stop the deal and for the creation of an
exclusive e-commerce policy and regulator. Meanwhile, the Draft National E-Commerce Policy, 2018,
suggested greater regulatory scrutiny for mergers and acquisitions that may distort competition. In this
context, the present study looked into the competition dimension of the deal and other related issues.
The study suggests to evolve a regulatory system with long-term vision to sustain and support the
domestically grown innovations while making the competition assessment more flexible to accom-
modate the challenges posed by digital revolution.
Keywords
mergers, acquisitions, restructuring, antitrust issues and policies, government policy and regulation,
market structure and pricing
The Competition Commission of India (the Commission) approved India’s highest-valued acquisition
thus far, the acquisition of Flipkart (an Indian start-up) by Walmart (a U.S.-based retail giant) within
the first phase of investigation
1
itself, stating that it is “not likely to have an appreciable adverse effect
on competition in India.”
2
Following this clearance, Walmart acquired 77%of the outstanding shares
of Flipkart for an approximate value of US$16 billion (Rs. 1,10,072 crores). According to Walmart,
“the investment will help to accelerate Flipkart’s customer focused mission to transform commerce in
India through technology and underscores Walmart’s commitment to sustained job creation and
*Institute for Studies in Industrial Development Institutional Area II, New Delhi, India
Corresponding Author:
Beena Saraswathy, Assistant Profe ssor, Institute for Studies in Indus trial Development, Institutional Ar ea II, Vasant Kunj,
New Delhi-110 070.
Email: vsbeena@gmail.com
1. The second phase can be extended up to 210 days, which involves more detailed inquiry.
2. Competition Commission of India (hereinafter, CCI), Order on Combination Registration No. C-2018/05/571 (2018).
The Antitrust Bulletin
2019, Vol. 64(1) 136-147
ªThe Author(s) 2019
Article reuse guidelines:
sagepub.com/journals-permissions
DOI: 10.1177/0003603X18823619
journals.sagepub.com/home/abx

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT