The Competition Commission of India suspended its approval of Amazon’s 2019 deal with Future Coupons, on the sole basis of which the US e-tailer was fighting several legal battles to block Future Group’s proposed sale of assets to Reliance Retail for Rs 25,000 crore.
The development, which has far-reaching implications for the Jeff Bezos-led etailer in the domestic market and the Indian retail industry, could prove to be a stepping stone for the Reliance-Future deal to go through, subject to regulatory and legal approvals. The antitrust watchdog said it wants to examine the Amazon-FCPL deal afresh. In addition, it slapped a Rs 200-crore penalty on Amazon for making “false and incorrect statements” and suppressing the “actual purpose” of the deal, while seeking approval.
Amazon has 60 days to re-appeal for approval with “true, correct and complete” information and, till then, its order for approval for the 2019 deal “shall remain in abeyance”, said CCI. This leaves Amazon with a few options, sources said, that include appealing to a higher court or approaching the National Company Law Appellate Tribunal.
In 2019, Amazon had acquired 49% in FCPL, an unlisted Future Group entity, for Rs 1,500 crore. Since FCPL held around 10% in FRL, the e-tailer claimed it gave it rights over the latter. Subsequently, when the Future-Reliance deal was announced, Amazon dragged FRL to a Singapore arbitration court for alleged violation of contracts.