India’s antitrust agency on Friday suspended Amazon.com’s 2019 deal with Future Group, potentially denting the US e-commerce giant’s attempts to block the sale of Future’s retail assets to an Indian market leader.
The regulator ruled that the US company had suppressed information while seeking regulatory approval on an investment into Future Group two years ago.
The ruling by the Competition Commission of India (CCI) could have far-reaching consequences for Amazon’s legal battles with now estranged partner.
Amazon has for months successfully used the terms of its $200 million investment in Future in 2019 to block the Indian retailer’s attempt to sell retail assets to Reliance Industries for $3.4 billion.
The regulator’s 57-page order said it considers “it necessary to examine the combination (deal) afresh”, adding its approval from 2019 “shall remain in abeyance” until then.
‘Suppressed Actual Scope’
The CCI’s order said Amazon had “suppressed the actual scope” of the deal and had made “false and incorrect statements” while seeking approvals.
“The approval is suspended. This is absolutely unprecedented,” said Shweta Dubey, a partner at the SD Partners law firm, who was formerly a CCI official. “The order seems to have found new power for CCI to keep the combination approval in abeyance.”
With the 2019 Future deal’s antitrust approval now suspended, it could hurt Amazon’s legal position and retail ambitions, while making it easier for Reliance – the country’s largest retailer – to acquire number two player Future.
The CCI also imposed a penalty of 2 billion rupees ($27 million) on the US company, adding that Amazon will be given time to submit information again to seek approvals, the CCI added.
Future Group, however, is unlikely to cooperate with Amazon if it tries to reapply for antitrust clearance after the CCI’s decision.
The Indian company is also set to take CCI’s Friday decision before various legal forums to argue that Amazon has no legal basis to challenge its asset sale, the source added.
- Reuters, with George Russell
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