 on Friday suspended US E-commerce giant Amazon's 2019 deal with Future Retail Ltd. The CCI has imposed a fine of Rs 200 crore on Amazon for concealing information while it sought approval of the commission for its deal with the Future Group.){kind=link}
The Competition Commission of India (CCI) on Friday suspended US E-commerce giant Amazon’s 2019 deal with Future Retail Ltd. The CCI has imposed a fine of Rs 200 crore on Amazon for concealing information while it sought approval of the commission for its deal with the Future Group.
The bench dealing with dispute observed that the Amazon group had suppressed the actual scope of the deal it was intending to make and had also made untrue and incorrect statements while seeking consent of the commission. A penalty of around Rs 2 billion ($27 million) was imposed on Amazon.
The commission while exercising its powers conferred under sub-section (2) of Section 45 of the Act further said that it is necessary to examine the deal afresh. Amazon was directed to give notice in prescribed format within a period of 60 days from the date of receipt of this order and other approvals which are already granted shall remain in abeyance.
Though the commission said that Amazon will be given time to submit information again to seek further approvals.
The counsel appearing on behalf of the Amazon group submitted that in the 2019 deal, the terms agreed were to pay $200 million for a 49% stake in Future’s gift voucher unit to prevent the Future Group from selling its Future Retail Ltd business to its rivals which includes Reliance group as well.
However when the Future group complained to the Competition Commission about Amazon concealing facts through a letter to CCI which sought revocation of the approvals given to Amazon. An explanation was called in by the commission in June which said saying it was hiding true aspects of the transaction by not disclosing its interest in Future Retail while seeking approvals.
Amazon said it never concealed any material information in the said deal, and also tried to convey that the revocation of the deal would send a negative signal to foreign investors planning to invest in the country.
The CCI had been directed by the Delhi High Court in mid-November to decide if it wanted to withdraw the clearances it had given to the Amazon-Future Coupons deal in two weeks.
In September, the Supreme Court had ordered the National Company Law Tribunal, the CCI, and the Securities and Exchange Board of the India not to pass any final order on the dispute for four weeks.
Earlier in August this year, the Apex Court had allowed Amazon’s appeal against a Delhi High Court order that had stayed attachment of properties of Future Group companies and Kishore Biyani over the Future-Reliance deal. The plea was filed by the Biyani-headed Future Coupons and his family members against the High Court order, which had directed status quo, which prevented them from transferring retail assets to Restricted Person, including the Reliance Mukesh Dhirubhai Ambani Group (MDA).