The trade group alleged that the two companies give big discounts and more prominent listings to those sellers, many of which they control or have a stake in. Amazon and Flipkart also give preference to products from their in-house brands and have signed exclusive deals with several companies, particularly smartphone makers, the trade group added.
The commission said it expects the investigation to be completed in the next 60 days.
Amazon also denied wrongdoing and said it would cooperate with the investigation.
“We welcome the opportunity to address allegations made about Amazon; we are confident in our compliance, and will cooperate fully with CCI,” a company spokesperson said.
The antitrust investigation comes days after Walmart laid off 56 employees in India, including eight senior managers. Walmart said in a statement to CNN Business that the layoffs were part of a review to improve efficiency, adding that it continues to invest in India.
The Confederation of All India Traders (CAIT), another large trade group that represents millions of small brick-and-mortar stores across the country and has vocally opposed Amazon and Walmart, said it welcomed the investigation.
“Both Amazon and Flipkart have left no stone unturned in destroying and devastating the e-commerce and retail trade market by indulging in all kinds of malpractices,” CAIT Secretary General Praveen Khandelwal said in a statement. “Their autocratic business model has resulted in the closure of thousands of shops,” he added.
— Michelle Toh contributed to this report