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CCI reportedly accuses Amazon of hiding facts during deal with Future Group unit

Amazon

The Competition Commission of India has accused e-commerce major Amazon of hiding factual aspects and making false submissions about its investment in Kishore Biyani’s Future Retail when it sought the watchdog’s approval for the deal in 2019, Reuters reported

The antitrust watchdog sent a letter to Amazon on June 4 noting that “the representations and conduct of Amazon before the Commission amounts to misrepresentation, making false statement and suppression or/and concealment of material facts”. 

The development comes as Amazon finds itself locked in a legal battle against Reliance Industries over Future Group’s decision to sell its retail unit to the latter. The case is currently at the Supreme Court and the next date of hearing is July 27.

Amazon has been referring to a non-compete clause in its transaction with Future Coupons which barred it from any deal with 30 companies, including Reliance Industries.

The CCI said that while seeking permission for the deal in 2019, Amazon had intimated the commission that the transaction would address gaps in India’s payments industry. 

However, the letter noted that Amazon had concealed its “strategic interest” since it has been contesting that the deal with Future Coupons gave it special rights over Future Retail. 

The letter also said that in 2019 Amazon had claimed it had nothing to do with one particular legal agreement that two Future Group entities had signed between themselves days ahead of its 2019 deal. 

But later, in front of an arbitrator, Amazon said that the agreement was an “integrated part” of the transaction, the letter noted.

The CCI asked Amazon why it should not take action and penalise the company for providing false information.

Amazon told Reuters that it has received the letter and was committed to complying with India’s laws and would extend its full cooperation to the CCI. We have reached out to Amazon and CCI for more details and will update the story when they respond. 

Last October, a Singapore-based single judge arbitration panel had ruled that Reliance Retail and Future Group should not proceed with the deal until it hears the matter. In its order, the panel had said that the deal between Future and Reliance violated Amazon’s contractual rights. 

However, despite the outcome of the arbitration, the Competition Commission of India had approved the deal in November 2020 which would have meant Reliance taking over 1,800 stores of Big Bazaar, EasyDay, FBB and Food Hall, and the Rs 19,000 crore debt and liabilities of the Future Group. 

In its response, Amazon had moved the Delhi High Court in January to get the emergency arbitration award recognised in India and a single-judge bench had then stayed the deal. However, soon after, the Future Group moved the Delhi High Court again where a division bench vacated the order passed by the single-judge bench. 

Amazon then moved the Supreme Court challenging the High Court’s order. Which is where this saga will move ahead on July 27.  

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