In a major development, the Competition Commission of India (CCI) on Friday suspended its more than two-year-old approval for Amazon’s deal to acquire a stake in Future Coupons Pvt Ltd and also imposed a Rs 202 crore fine on the e-commerce company. major for certain violations.
This comes amid a bitter legal battle between Amazon and Future Group over the latter’s proposed Rs 24,713 crore deal with Reliance Retail Ventures Ltd (RRVL). Against this background, Future Group had filed a complaint with the CCI.
In a 57-page order, the regulator said approval for the Amazon-Future Coupons deal “will continue to be delayed.” Citing certain violations, CCI said those arose “from an intentional design by Amazon to suppress the true scope and purpose of the combination” and that it finds no mitigating factor.
As a result, fines totaling Rs 2 crore have been imposed on Amazon. For failing to report the combination in the required conditions, the watchdog has also imposed a fine of Rs 200 crore.
The parties involved in the combination were Amazon.com NV Investment Holdings LLC (Amazon) — a direct subsidiary of Amazon.com Inc — and Future Coupons.
“We are reviewing the injunction passed by the Competition Commission of India and will decide next steps in due course,” an Amazon spokesperson said in a statement.
When approving the deal in November 2019, CCI had also pointed out that the order will be withdrawn if information provided by the acquirer proves to be incorrect at any time.
“This approval should in no way be construed as immunity from subsequent proceedings before the Commission for breach of other provisions of the (competition) law,” it said.
On Nov. 29, the Supreme Court gave Amazon two weeks to appear and plead before the CCI, which had rejected a hearing adjournment in a case involving the withdrawal of approval given to the e-retailer for the e-retailer. deal with Future Coupons.
In August 2019, Amazon had agreed to purchase 49 percent of unlisted Future Retail coupons, which owns 7.3 percent shares of publicly traded Future Retail through convertible warrants, with the right to redeem after a period of 3 to 10 years. in the flagship Future Retail.
In August 2020, RRVL said it will acquire Future Group’s retail, wholesale and logistics and warehousing operations for Rs 24,713 crore.
The agreement includes the consolidation of Future Group’s retail and wholesale assets into one entity Future Enterprises Ltd and their transfer to Reliance Retail. The deal has been challenged by Amazon, an investor in Future Coupons.