Amazon and its rival in India, the Walmart-owned Flipkart, did not break regulations through their selection of merchants and brands, the Competition Commission of India (CCI) said in a ruling late on Tuesday.
The decision is a defeat for a lobby group representing thousands of online sellers in India.
A case brought by the All India Online Vendors Association (AIOVA), which represents more than 3,500 online sellers, complained that Flipkart was using its dominant position to favour select sellers - an argument the CCI rejected.
AIOVA's case alleged Flipkart was not adhering to a section of India's anti-trust laws that says companies should not abuse a dominant market position through “unfair or discriminatory” pricing.
“Looking at the present market construct and structure of online marketplace platforms market in India, it does not appear that any one player in the market is commanding any dominant position at this stage of evolution of market,” the Commission said in its ruling.