CCI suspends Amazon-Future deal, imposes penalty

In an unprecedented step, the antitrust body- the Competition Commission of India (CCI)  on Friday suspended Amazon.com's 2019 deal with Future Group following a review of allegations that the U.S. e-commerce giant had concealed information while seeking regulatory approval. The U.S. firm has for months successfully used the terms of its toehold $200 million investment in 2019 to block Future's attempt to sell retail assets to Reliance Industries for $3.4 billion. the CCI said it considers "it necessary to examine the combination (deal) afresh," adding its approval from 2019 shall "shall remain in abeyance" until then. Amazon had "suppressed the actual scope" of the deal and had made "false and incorrect statements" while seeking approvals, the CCI order added.

The CCI also imposed a Rs 202 crore penalty on the e-commerce major for certain contraventions. 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 backdrop, Future Group had complained to the CCI. In a 57-page order, the regulator said the approval for the Amazon-Future Coupons deal "shall remain in abeyance". "We are reviewing the order passed by the Competition Commission of India, and will decide on next steps in due course," an Amazon spokesperson said in a statement. While approving the deal in November 2019, CCI had also mentioned the order shall stand revoked if, at any time, the information provided by the acquirer was found to be incorrect.

In August 2019, Amazon had agreed to purchase 49 per cent in unlisted Future Coupons, which owns 7.3 per cent equity in listed Future Retail through convertible warrants, with the right to buy into the flagship Future Retail after a period of 3 to 10 years. In August 2020, RRVL said it will acquire the retail and wholesale business, and the logistics and warehousing business of Future Group for Rs 24,713 crore.