CCI slaps ₹202 crore fine on Amazon; Puts 2019 deal on hold with Future

The CCI referred to various agreements between Amazon and Future Group entities and stated that Amazon allegedly failed to notify certain shareholder agreements and commercial arrangements involving Future Group as part of the combination between the parties and that but suppressed the real purpose and details of the deal. ,

Amazon’s investment in Future Coupons Pvt Ltd. (FCPL) has been at the center of a bitter legal battle between the two groups over the sale of its retail business by Future Group to Reliance Retail Ventures Limited (RRVL). 24,700 crores.

CCI fined Amazon, 200 crore and 2 crores, are levied separately under different sections of the law relating to reporting of obligations of the parties involved in a transaction. The regulator pointed to a “deliberate design on Amazon’s part to suppress the true scope and purpose of the combination” and said it found no mitigating factor. Amazon has 60 days to pay the penalty. Keeping the 2019 deal on hold, the CCI also directed Amazon to file a fresh notice regarding the transaction within 60 days.

Amazon said it is examining the CCI order. “We are reviewing the order passed by the Competition Commission of India and will decide on the next course of action,” a company spokesperson said in an emailed statement. Emails sent to Reliance and Future Group remained unanswered at the time of publication.

The CCI had approved the deal in November 2019 after assessing the overlapping businesses of Amazon, FCPL and their group entities, concluding that the deal is not likely to adversely affect competition in the market.

However, in March, FCPL stated that Amazon initiated arbitration proceedings relating to the transfer of the assets of Future Retail Ltd, in which FCPL holds a 9.82% stake, alleging that Amazon had initiated arbitration proceedings regarding its investment in FCPL. I contradicted his stance in comparison to his submission. According to the regulator before the CCI, the FCPL petition states that such contradictions set up a false representation before the CCI and suppression of material facts.

In short, Amazon should have notified the interconnected steps to acquire strategic rights over FRL through an FCPL shareholder agreement and a combination of the Future Retail Ltd Shareholders Agreement and the commercial agreements between Amazon and Future Groups, the order said. .

Meanwhile, the Confederation of All India Traders said the CCI order and imposition of penalty against Amazon was a “historic order”.

CAIT has accused Amazon of not disclosing its strategic interest in Future Retail while seeking approval for the deal. CAIT had urged CCI to revoke the 2019 approval given for Amazon’s deal with Future Coupons. The merchants’ body alleged that Amazon made false statements to obtain a regulatory clearance.