CCI revokes clearance to Amazon 2019 deal with Future Coupons, slaps ₹200 Crore penalty

CCI revokes its clearance to amazon’s 2019 deal with future coupons a unit of future retail Ltd on 17 November and imposed 200 crores fine on the giant U.S E-commerce company for concealing the facts and reporting false claims. Amazon and future groups are in a tough battle in court after future coupons limited agreed to sell its assets to Mukesh Ambani reliance group for an amount of 24,500 crores. CCI has suspended amazon’s deal with future coupons after reviewing the complaint filed by future groups that amazon has concealed information about its deal with future groups while seeking regulatory approval. Parties involved in the deal were amazon .com NV investment holding LLC ( Amazon ), The direct subsidiary of amazon, and future coupons.

In 57 pages Indian anti-trust regulator said that amazon had suppressed ”The actual purpose and particular of the 2019 deal and sought to establish false representation and suppression of material facts”. CCI said it’s necessary to examine the deal afresh and said its approval shall remain on hold.

Amazon is also charged by Complain- future coupons private limited and Confederation of all India Traders( CAIT) for not disclosing the intent to indirectly control the parent firm. Amazon has an acquisition of 49 percent stake in FPCL. Amazon had suppressed the actual scope of the combination and had made a false and incorrect statement concerning the commercial agreement which is intertwined into the scope and purpose of the combination CCI order said. The independent directors examined the pre-contracted negotiation records of Amazon’s investment in FCPL and found the representation made by Amazon in the CCI application ‘ completely contradicts the internal correspondence.

Amazon company argued that the statuary body does not have the power to revoke the deal of which clearance has already been issued. He added the revoked approval is drastic power and is not available to the statuary body.

CAIT rebut the argument on December 15 saying ‘ The company should not participate in any of the CCI preceding ‘ If it believed that the agency does not have the power to revoke the deal.

CCI revokes clearance to Amazon 2019 deal with Future Coupons, slaps₹200 Crore penalty

Amazon has also alleged future coupons have violated the norms of a contract signed between them by sharing the assets with the reliance company. Amazon which has a 3% stake in future retail through its 49% shareholding in future coupons, objected to the deal saying that it had barred future groups from getting into any retail agreement with 11 companies including reliance. Future says that all claims by amazon are wrong. 

Future coupons have also complained that amazon misleads CCI. Earlier the company was planning to invest in an Indian retail company but after the implementation of government laws of press note 2 which tightened the norms for foreign E-commerce entities separating in India. Has changed its plan and invested in a foreign retail company. Amazon company never intended to invest in future coupons PVT ltd because of its unique business model and strong growth potential. 

Traders’ bodies also release an exact from the email sent by amazon high official Rakesh Bakshi to Amazon CEO Jeff Bezos. The e-mail does not talk about future business.

Antitrust bodies have also imposed a fine of 200 crore rupees on amazon company for concealing facts reports claimed. In an exercise of the power conferred under subsection (2) OF section 45 of an act. The commission hereby strictly amazon to give notice in form 11 within the period of 60 days from the receipt of this order till disposal of such notice.

CCI revokes clearance to Amazon 2019 deal with Future Coupons, slaps ₹200 Crore penalty

CCI orders come two weeks after the supreme court had given two weeks to amazon to file its response in a case. The CCI was giving its order in march application filed by FCPL, where the future groups had alleged that the U.S e-commerce giant is concealing facts and flaunting India’s foreign direct investment and foreign exchange laws while seeking the watchdog approval in 2019 for amazon’s investment into FCPL.

The supreme court of India in august upheld the emergency award given to amazon by the Singapore arbitration center (SIAC) which considered the future and reliance deal invalid. The case is still pending before India’s supreme court.

The CAIT had requested the union minister Piyush Goyal to immediately suspend the amazon portal in India, CAIT, secretary-general Praveen Khandelwal said in a statement (ANI).