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CCI suspends Amazon-Future deal nod

The 2019 deal gave Amazon the option to buy FCPL’s promoter Future Retail within 3-10 years, which Amazon has relied on to get a stay on a proposed buying of Future Group’s retail assets by RIL.

By: ENS Economic Bureau | New Delhi |
Updated: December 18, 2021 8:50:46 am
The Commission found that Amazon had not disclosed details of the shareholder agreement at the time of acquisition and its purpose to acquire strategic rights over Future Retail and to have a “foot in the door” in Indian retail. (File)

The Competition Commission of India (CCI) on Friday suspended its nod to Amazon’s 2019 investment in Future Coupons Private Ltd (FCPL), after finding that Amazon had concealed significant information while seeking regulatory approval. The suspension, termed “unprecedented” by experts, may hit Amazon’s efforts to block Reliance Industries’ (RIL) acquisition of Future Retail’s assets.

The 2019 deal gave Amazon the option to buy FCPL’s promoter Future Retail within 3-10 years, which Amazon has relied on to get a stay on a proposed buying of Future Group’s retail assets by RIL.

“Amazon had misled the Commission to believe, through false statements and material omissions, that the combination and its purpose were the interest of Amazon in the business of FCPL,” the CCI noted in its order, placing its prior nod to the combination in abeyance and giving Amazon 60 days to give notice for the combination, post which the Commission would “examine the combination afresh.”

The CCI said suppression of key information arose “from a deliberate design on the part of Amazon to suppress the actual scope and purpose of the Combination,” and imposed a fine of Rs 202 crore on the company.

Experts said that the move was unprecedented and likely to be challenged.

Vaibhav Choukse, partner at law firm JSA, said the move by the competition regulator was the first instance of the Commission suspending its approval since the introduction of the merger control regime in 2011, adding “whether the CCI has the power to do that under the scheme of the Competition Act will be tested before the appellate court.”

The Commission found that Amazon had not disclosed details of the shareholder agreement at the time of acquisition and its purpose to acquire strategic rights over Future Retail and to have a “foot in the door” in Indian retail.

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