CCI stung Amazon suspending 2019 Future Group deal! Check it Out!
The chief national competition regulator in India, the Competition Commission of India (CCI) decided to keep Amazon’s 2019 deal with the Indian firm Future in abeyance, denting the goodwill of the US-based company in India. The Indian anti-trust body imposed a ₹200 crore penalty on the e-commerce giant.
Amazon as said by the CCI has concealed certain information and their actual purpose while seeking regulatory approval for investing in the Indian retailer Future Group two years ago.
The decision will have some long-term consequences on Amazon. It had successfully blocked Future’s desire to sell its assets to Reliance Industries with the terms of its toehold $200 million investment. Amazon deliberately suppressed the scope of the 2019 Future Deal.
The CCI has made a 57-page order where it stated that the watchdog considers “it necessary to examine the combination (deal) afresh,” adding its approval from 2019 “shall remain in abeyance” until then.
Amazon had “suppressed the actual scope” of the deal and had made “false and incorrect statements” while seeking approvals, the CCI order added.
A part of Indian law firm SD Partners and a former official of CCI, Shweta Dubey said, “The approval is suspended. This is absolutely unprecedented.”
She further added, “The order seems to have found new power for CCI to keep the combination approval in abeyance.”
According to CCI, Amazon will be given the time to submit important information again to seek approvals. Amazon said it is reviewing the order “and will decide on next steps in due course.”
It will hurt the retail ambitions of Amazon as it may lead to the country’s largest retailer, Reliance to acquire the number 2 player in the market, Future.
Amazon has argued that it has never suppressed material information and asked the regulator body that it will have adverse effects on foreign investors.
Future Group complained to the CCI regarding hidden information and thus it is unlikely that it may cooperate with Amazon even if Amazon reapplies for regulatory approval.