The Competition Commission of India (CCI) on Friday suspended Amazon‘s 2019 deal with estranged partner Future Group, upholding allegations that the US e-commerce giant had concealed information while seeking regulatory approval. The antitrust body also imposed a Rs 200 crore penalty on Amazon, which for months has successfully used the terms of its $200 million investment in 2019 to block Future’s attempt to sell retail assets to Reliance Industries for $3.4 billion. In November 2019, CCI had given its approval for Amazon to acquire a 49% stake in Future Coupon.
In a 57-page order, the CCI said it considers “it necessary to examine the combination (deal) afresh.”
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Amazon had “suppressed the actual scope” of the deal and had made “false and incorrect statements” while seeking approvals, the CCI order added.
“In exercise of the powers conferred under sub-section (2) of Section 45 of the Act, the Commission hereby 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,” the CCI order read.
The Delhi High Court had last month directed the CCI to rule on revoking its approval to the Amazon-Future Coupons deal within two weeks. This was after the Confederation of All India Traders (CAIT) filed a public interest litigation (PIL) against CCI that the regulator was yet to take a decision on a show-cause notice it had issued to Amazon in June.
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Independent directors of Future Retail Ltd had also wrote a letter to CCI seeking revocation of the nod given to Amazon’s 2019 investments into Future Coupons. “Amazon has concealed facts, made misrepresentations and false representations to the Commission,” the letter alleged.
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Amazon had “not disclosed its strategic interest over FRL” while getting approval from the CCI to prevent it from referring the transaction to other governmental agencies that “would have responded that the transaction is illegal,” according to the seven-page letter written to CCI Chairman Ashok Kumar Gupta.
The approval did not hold good due to the concealment and misrepresentation and false representations made by Amazon, the letter said. Future retail independent directors had also requested CCI to stop Amazon from “perpetuating its evil non-desirable designs” to make FRL bankrupt and jeopardise Rs 30,000 crore of debt extended by public sector banks to Future group.
(With PTI inputs)