CCI puts Amazon's investment in Future Coupons on hold, slaps Rs 202 Cr in penalty
CCI said that Amazon had misrepresented facts while seeking approval for its investment in Future Coupons in 2019.
The Competition Commission of India (CCI), the competition watchdog in India, has asked ecommerce major to pay a penalty of Rs 202 crore within the next 60 days for “..omissions, false statements and misrepresentation.”
The CCI was investigating the terms of Amazon NV Investment Holding’s investment in Future Coupons Private Limited (FCPL) after the ecommerce company filed a notice of arbitration with the Singapore International Arbitration Centre (SIAC), opposing the acquisition of Future Retail by Reliance Industries Limited (RIL) for $3.8 billion.
CCI had approved the proposed acquisition in an order dated November 20, 2020.
CCI in its order dated December 17 said that Amazon had suppressed the actual purpose of its investment in FRCPL to acquire 49 percent stake in the company in August 2019. CCI had approved the proposed investment previously.
The order also referenced the Public Interest Litigation (PIL) filed by the traders' body, Confederation of All India Traders (CAIT), in front of the Delhi High Court in November 2021, asking for a speedy decision by CCI to revoke the acquisition of FRCPL by Amazon.
In its order CCI said, “Given that the combination is between players who are known in the online marketplace and offline retailing and they have contemplated strategic alignment between their businesses, the commission considers it necessary to examine the combination afresh based on a notice to be given in Form II with true, correct and complete information, as required therein.”
It further added that Amazon was required to give notice in Form II within a period of 60 days and that the CCI order of approval for Amazon’s investment in FCPL shall remain in abeyance till then.
In a statement, an Amazon spokesperson said, “We are reviewing the order passed by the Competition Commission of India, and will decide on next steps in due course.”
CAIT president Praveen Khandelwal, in a media statement, said that “the vicious bid of Amazon to control Indian Companies has been foiled by CCI.”
Edited by Kanishk Singh