The Competition Commission of India (CCI) on Friday froze its approval given in November 2019 to Amazon’s investment in a Future Group unit on the grounds that the U.S. e-commerce company had suppressed the scope and full details of its investment while seeking regulatory approval.
The antitrust regulator also imposed a penalty of ₹200 crore on Amazon for failing to notify the details of its ‘combination’, as required in law. It also imposed a separate penalty of ₹2 crore for suppressing the actual scope and purpose of the combination, a term used in competition law for acquisition, merger or amalgamation of two or more enterprises.
The Commission had on November 28, 2019, granted approval for Amazon.com NV Investment Holdings’ proposal to acquire 49% in Future Coupons Private Ltd.
The CCI decision further roils the legal landscape as Amazon seeks to block the Future Group’s 2020 decision to sell its retail assets to Reliance Industries.
Amazon has 60 days to pay the monetary penalty. It has the same period to notify the combination afresh with “true, correct and complete information”.
The Commission said it would examine the Amazon-Future deal afresh, “given that the combination is between players who are known in the online marketplace and offline retailing and they have contemplated strategic alignment between their businesses”.
Reuters adds:
Amazon has for months successfully used the terms of its toehold $200 million investment in Future in 2019 to block the Indian retailer’s attempt to sell retail assets to Reliance.
Amazon, in responses to CCI reported by Reuters this week, said it never concealed material information, warning the watchdog that the deal’s revocation would send a negative signal to foreign investors.
The Future-Reliance deal has been on hold for months as Amazon got favourable interim rulings from a Singapore arbitrator and Indian courts.
Future denies any wrongdoing.
(With inputs from Reuters)
