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The Competition Commission has fined Amazon Rs 200 crore for concealing its true purpose and details in an agreement to invest in India’s Future Coupon.
This is considered a major setback for Amazon.
What is the background?
Amazon, a US-based e-commerce company, last invested $ 200 million in 2019 in Future Group’s Future Coupons. As a result, Amazon acquired a 49 percent stake in the company.
Future Coupons, the parent company of Future Retail, holds a 9.82 percent stake.
Amazon is said to have indirectly bought a 4.81 percent stake in Future Retail through a deal.
In August last year, Future Group agreed to sell its retail assets to Reliance for $ 3.4 billion.
Amazon objected, saying that under its investment agreement, Future Group could not enter into agreements with Indian companies, including Reliance.
In this regard, Amazon and Future Group have alternately filed lawsuits against Amazon.
What is the CCI Order?
In this context, the Competition Commission of India, also known as the CCI, has issued a 57-page order in this regard. It said the agreement between the two companies should be reviewed.
In addition, the CCI revoked the license it had granted in 2019, allowing Amazon to invest in Future Coupons.
In this regard, according to a report released by the Reuters news agency, the CCI said in its order that Amazon had concealed the true purpose of the deal and, for that, had provided false and misleading information.
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Indian law firm S.D. In an interview with Reuters news agency, Swetha Dubey of Partners said, “Amazon’s permission to invest in Future Coupons has been revoked. Seems to have handled.
CCI, in its order, has imposed a fine of Rs 200 crore on Amazon. CCI has given Amazon a second deadline to reapply for the contract, ”he said.
A source close to the matter told Reuters: “Although Amazon is applying for a second contract after the CCI decision, it is unlikely to receive a response from Future Group.
He further added that Future may take the CCI’s decision to various legal bodies. Future could thus say that Amazon has no legal basis to deal with the matter.
According to the Reuters news agency, “Future and Reliance have not commented.”
But, Amazon has commented. “We are reading the CCI decision in full and a decision on what to do next will be made soon,” the company said.