If the 2019 deal gets cancelled, it may be easier for Reliance to close the futures deal
Amazon has warned antitrust body that canceling its 2019 deal with Future Group would send a negative signal to foreign investors and allow local retail giant Reliance to “further restrict competition”, as seen by Reuters Gaya is a legal document.
The Competition Commission of India (CCI), reviewing its earlier approval of the US company’s $200 million investment in the Future unit in 2019, alleged that Amazon withheld facts when it sought approval for the transaction.
The CCI’s review had begun following complaints from Amazon’s now-separated partner, Future. Both sides have been at loggerheads since last year, after the US company successfully used the terms of its investment in 2019 to block an attempt to sell debt-laden Future’s retail assets to Reliance Industries for $3.4 billion.
While Future looks to liquidate, the legality of the $200 million short deal could have far-reaching consequences for the country’s retail sector.
If Amazon prevails, it will slow down Reliance’s plans to acquire Future at a time when it is already rapidly expanding into e-commerce.
And if the 2019 deal is cancelled, it could make it easier for Reliance to close a future deal, hurting Amazon’s retail ambitions, say people familiar with the controversy.
Amazon said in a confidential filing on December 12 that revoking the CCI’s approval “is bound to send a message to foreign investors that India’s economy and regulatory landscape are still not developed enough to provide stability and certainty to foreign investment”. Huh”.
Amazon, in its 60-page submission, said that Future’s aim to “reduce investments” allowing Reliance to consolidate its position would “further restrict competition in the Indian retail market”.
The fierce public battle over Future Retail pitted Jeff Bezos’s Amazon against Reliance, which was run by one of India’s richest men, Mukesh Ambani, in a bid for retail dominance in India.
Reliance is India’s No. 1 retailer with over 13,000 outlets, and is rapidly expanding into e-commerce.
Future Retail ranks second with over 1,500 outlets.
Amazon, Reliance and Future did not respond to requests for comment. CCI also did not respond.
No information hidden, CCI has ‘no power’
The Future-Reliance deal has been put on hold after Amazon received favorable interim rulings from a Singapore arbitrator and Indian courts. Future denies any wrongdoing, and the controversy is heard in multiple forums.
Amazon has argued that the terms agreed in the 2019 deal to pay $200 million for a 49 percent stake in Future’s gift vouchers unit allowed its parent, Future Group, to sell its Future Retail Ltd business to some rivals, including Reliance. prohibited from selling.
In June, CCI sought an explanation from Amazon, saying it hid factual aspects of the transaction by not disclosing its strategic interest in Future Retail while seeking approval.
In the CCI’s December 12 response – first being reported here – Amazon argues that no information was concealed from CCI and that attorneys representing Future Group “confirmed and approved” all submissions.
“No material information was concealed,” Amazon’s filing said.
The CCI’s 2019 approval order states that its decision “at any time, shall be deemed to be null and void if the information provided is found to be incorrect”.
But Amazon argued in its submission that the CCI has no power to do so, saying its approval order is final, not conditional, as per Indian laws.
Amazon argued, “the power to revoke approval is a coercive power and is not available to a statutory authority unless expressly provided”.
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