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Homechevron_rightIndiachevron_rightAmazon fined over 200...

Amazon fined over 200 crores by antitrust commission, Future Coupons deal with Ambani off

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Amazon fined over 200 crores by antitrust commission, Future Coupons deal with Ambani off
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The Indian Competition Commission of India has ruled that e-commerce giant Amazon pay a fine of approximately ₹202 crore rupees for hiding details related to a proposed deal made by Future Coupons and Mukesh Ambani's Reliance Retail Limited worth ₹24,713 crore. In its 57 page judgement the antitrust body suspended its approval for the regulatory license for the deal with Future Coupons, which it said Amazon had acquired by misrepresenting facts.

In 2019, Amazon had acquired a 49% stake in Future Coupons Private Limited, which in turn held 9.82% stake in Future Retail. Future Coupons proposed Rs 24,713 crore deal with Reliance Retail Ventures Ltd (RRVL) kicked off the tussle with Amazon objecting to the Ambani deal.

Future Group reached out to Reliance Retail after losses and debt mounted for the company, propelled by loss of sales under the pandemic. Amazon took objection to the deal on the basis of its stake in Future Coupons and initiated legal proceedings in the Delhi High Court as well as the Singapore International Arbitration Centre (SIAC), a tussle which is also ongoing in the Supreme Court of India.

"...The Internal Correspondence of Amazon clearly shows different purposes for envisaging the Combination (i.e., 'foot-in-door' in the Indian retail sector, secure rights over Future Retail that are considered as strategic by Amazon and Commercial Arrangements between the retail business of Future Group and Amazon)," the order read.

Emails from Amazon India legal affairs head and general counsel Rakesh Bakshi and US head Jeff Bezos were provided to the court in which Bakshi discusses a "twin entity" investment in Future Coupons which would allow them to secure a bigger hold in the Indian retail market.

Amazon had also paid a premium of 25 percent over the share price of Future Retail during the deal to bag strategic rights and a Call Option, the mail clarifies.

Having accused Amazon of hiding these crucial details on the actual motive of the deal, the CCI said, "Misrepresentations and suppressions are serious challenges to the trust based regulatory mechanism for combinations and the sanctity of the institutional framework established under the Act (Competition Act, 2002)," as quoted by media sources.

Since there was no clarity on the true scope of Amazon's investment in Future Coupons despite the company having been given two weeks and a chance to come clean on November 29, the CCI concluded that this amounted to having obtained regulatory approval through fraud.

Amazon representatives have said the company is reviewing the CCI order.

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TAGS:ecommerceAmazon Indiaantitrust violationsIndia
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