Companies

CCI issues notice to Amazon for suppression of facts

Forum Gandhi Mumbai | Updated on July 22, 2021

The Competition Commission of India has slapped a show-cause notice against Amazon in relation to its investment in Kishore Biyani-led Future Coupon Private Limited (FCPL) in 2019.

The regulator has alleged that the e-commerce giant has “furnished false and incorrect information,” and “concealed/suppressed material facts”. The competition regulator has also threatened to penalise Amazon under at least three sections of the Competition Act.

The four-page notice issued on June 4 said that it had accepted FCPL’s application seeking action against Amazon. A copy of the notice was reviewed by BusinessLine.

“Under Sections 43A, 44 and 45 of the Act read with Regulation 48 of the Competition Commission of India (General) Regulations, 2009 you are being issued this show cause notice to explain, in writing, as to why you shall not be found to have: (a) failed to give notice in respect of Future Retail Limited Share Holder Agreement (FRL SHA); and (b) furnished false and incorrect information; and concealed/ suppressed material facts, in contravention of the said provisions of the Act…” the notice said.

Sources close to the matter told this newspaper that Amazon is yet to respond to the notice. When contacted, an Amazon spokesperson said: “We are in receipt of a showcause notice from the CCI based on the complaint filed by Future as a part of an ongoing dispute. We are committed to comply with the laws of India and will extend full cooperation to the CCI on this matter. We are confident that we will be able to address the CCI’s concerns.”

However, it refused to comment further due to the ongoing litigation with FCPL and Future Retail Limited (FRL). Future Group remained unavailable to comment. The 2019 deal is central to this dispute.

In 2019, CCI had approved the acquisition of 49 per cent shares of FCL by Amazon. Under this deal, according to Amazon, FCPL had an agreement that Future Retail would not sell its assets to “restricted parties,” which included Mukesh Ambani-owned companies too. However, last year Future Retail announced a ₹25,000-crore deal with Reliance Retail.

Amazon dragged FCPL and FRL to Singapore International Arbitration Centre (SIAC) claiming that the Future-Reliance deal was against the 2019 agreement.

The competition commission explained that on at least three grounds it has found contradiction on Amazon’s stand in 2019.

Published on July 22, 2021

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