New Delhi: In a significant development, the Competition Commission of India (CCI) on Friday suspended its more than two-year-old approval for Amazon’s deal to acquire stake in Future Coupons Pvt Ltd and 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”.
Citing certain contraventions, CCI said those have arisen “from a deliberate design on the part of Amazon to suppress the actual scope and purpose of the combination” and that it finds no mitigating factor.
Consequently, fines totalling Rs 2 crore have been imposed on Amazon.
For failure to notify the combination in the requisite terms, the watchdog has also slapped a penalty 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 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.
“This approval should not be construed as immunity in any manner from subsequent proceedings before the Commission for violations of other provisions of the (Competition) Act,” it had said.
On November 29, the Supreme Court gave two more weeks’ time to Amazon to appear and argue before the CCI which had declined adjournment of hearing in a case related to revocation of approval given to the e-retailer for the deal with Future Coupons.
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. The scheme of arrangement entails the consolidation of Future Group’s retail and wholesale assets into one entity Future Enterprises Ltd and then transferring it to Reliance Retail.
The deal has been contested by Amazon, an investor in Future Coupons.