CCI suspends Amazon’s 2019 deal with Future Group, slaps Rs 200 crore penalty
Amazon’s 2019 deal with Future Group, a unit of Future Retail Ltd. was suspended by the Competition Commission of India (CCI) on Friday.
New Delhi: Amazon’s 2019 deal with Future Group, a unit of Future Retail Ltd. was suspended by the Competition Commission of India (CCI) on Friday. A penalty of Rs 200 crore has also been imposed on the US retail giant for concealing information while seeking a nod from CCI.
In the order, CCI stated, “it necessary to examine the combination (deal) afresh.” It also stated, “In exercise of the powers conferred under sub-section (2) of Section 45 of the Act, the Commission thereby directs Amazon to give notice in Form II within a period of 60 days from the receipt of this order and till disposal of such notice, the approval granted vide Order dated 28th November, 2019, in Combination Registration No. C-2019/09/688, shall remain in abeyance.”
Further it stated, “Amazon had suppressed the actual scope of the Combination and had made false and incorrect statement in relation to the BCAs, which are intertwined into the scope and purpose of the Combination.”
The Delhi High Court on November 16, had directed CCI to rule on nullifying its approval to the Amazon-Future Coupons deal within two weeks. Earlier, the Confederation of All India Traders (CAIT) had filed a PIL against CCI showing that the regulator had issued a show-case notice to Amazon in June, however, no decision has been taken yet.
Besides, letters were written to CCI by the Independent directors of Future Retail Ltd. asking for the revocation of the approval given to the US giant’s 2019 investment into the Future Coupons. Besides, they accused the retail giant of submitting “completely opposite information” while seeking approval from the CCI. The letter stated, “Amazon has concealed facts, made misinterpretations and false representations to the Commission.”
According to Amazon, the company had “not disclosed its strategic interest over FRL” meanwhile getting approval from the CCI to prevent it from referring the transactions to other governmental agencies that “would have responded that the transaction is illegal.”
Besides, in November 2019, Amazon was approved to acquire a 49% stake in Future Coupon.