Indian Competition Regulator Slaps $26.5 Mln Penalty on Amazon for Hiding Info in Future Group Deal
14:37 GMT 17.12.2021 (Updated: 10:41 GMT 19.07.2022)
The Competition Commission of India (CCI) had approved a $200 million investment of Jeff Bezos’ Amazon in Future Coupons Private Ltd – a subsidiary of India’s Future Retail Ltd. However, the legal dispute began after Amazon attempted to block Mukesh Ambani-led Reliance Group from purchasing the retail business of Future Group.
The Competition Commission of India (CCI) – the country’s anti-trust body – has slapped a $26.5 million penalty on Amazon for concealing information related to a deal that it reached with a subsidiary of Future group in 2019.
The CCI has also suspended the approval of the $200 million contract, despite Amazon’s warning that revocation of its 2019 deal would send a negative signal to foreign investors.
The probe found that Amazon had suppressed “the actual purpose and particulars” of the 2019 deal with Future Coupons and sought to “establish false representation and suppression of material facts.”
Amazon has been directed to pay a monetary penalty within 60 days from now.
The order has provided significant relief to Mukesh Ambani-led- Reliance Group as its plan to acquire Future Group’s retail business for $3.4 billion was on hold for months after Amazon successfully received favourable interim rulings from a Singapore arbitrator and Indian courts.
Amazon claimed that under the 2019 deal, Future Group could not sell its retail business to rivals, including Reliance which owns India’s biggest retail chain with over 13,000 outlets across the country.
The matter was reached at India’s anti-trust body after Future Coupons Private Ltd (FPCL) and the Confederation of All India Traders (CAIT) filed complaints with CCI.
The two complainants alleged that Amazon did not disclose the intent to indirectly control the Kishore Biyani led Future Retail Ltd. through its 49 percent stake in FPCL.