Future tense. CCI suspends Amazon’s 2019 deal with Future group

Antitrust regulator Competition Commission of India (CCI) has held the 2019 deal between Amazon and Future Group in abeyance.

Further, the Commission imposed a penalty of ₹202 crore on Amazon “for providing false information” and “suppressing material particulars”, per its order. Amazon said it is reviewing the order.

This comes in the backdrop of Future Retail and Amazon fighting a legal battle over the former’s deal with Reliance Industries to sell assets worth ₹ 24,713 crore.

This deal was challenged by Amazon, which had invested ₹1,400 crore in Future Coupon Private Ltd (FCPL) in 2019. Amazon had alleged that it had invested in FCPL on condition that Future Retail would not sell its assets to restricted parties, including Reliance.

On the other hand, earlier this year, FCPL and the Confederation of All India Traders (CAIT) had complained to the CCI about Amazon not disclosing its intent to indirectly control the parent firm, Future Retail Ltd, through its acquisition of 49 per cent stake in FCPL.

In a 57-page order, anti-trust regulator said Amazon suppressed “the actual purpose and particulars” of the 2019 deal and sought to “establish false representation and suppression of material facts”. CCI said it was now “necessary to examine” the deal afresh. It added that its approval “shall remain in abeyance” until then.

“It is evident that these statements have been made with full knowledge that the same are false in material particulars.

“Amazon had misled the Commission to believe, through false statements and material omissions, that the combination and its purpose were the interest of Amazon in the business of FCPL,” CCI said.

Reviewing order: Amazon

“We are reviewing the order passed by the CCI, and will decide on next steps in due course,” an Amazon spokesperson said in a statement.

Consequently, the CCI imposed fines of ₹ 2 crore and ₹200 crore for failure to notify the combination in the requisite terms.

CAIT National President B C Bhartia and Secretary General Praveen Khandelwal alleged that the order of the CCI is a first concrete result of more than two years rigorous efforts of CAIT for bringing misdeeds of Amazon into limelight.

They said that the order is an indication for not only Amazon but for other foreign funded e-commerce companies to stop violating the law, rules and FDI policy of the Government.

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