India cancels Amazon’s permission to acquire Future, fines 2 billion rupees

According to reports, India’s antitrust regulator, the Competition Commission of India (CCI), today revoked Amazon’s permission to acquire Future Coupons, a subsidiary of Future Retail Ltd. (Future Retail Ltd). At the same time, Amazon was fined 2 billion rupees (approximately US$26.3 million) by CCI for concealing transaction facts.

CCI’s action against Amazon this time was initiated in response to complaints from Future Coupons and the All India Chamber of Traders (CAIT). Just a few days ago, Amazon also argued that CCI does not have the legal power to cancel a transaction that has already been licensed.

As early as August 2019, Amazon announced the acquisition of a 49% stake in Future Coupons, the second largest retail chain in India. Future Retail operates more than 900 stores in India and owns several supermarket brands including Big Bazaar.

But then, due to the impact of the new crown pneumonia epidemic, Future Retail decided to sell its retail business to another local industrial giant Reliance Industries (Reliance Industries). But the plan was opposed by Amazon.

Amazon said that in accordance with the terms reached in its purchase of 49% of Future Coupons for US$192 million in 2019, future retail is prohibited from selling its retail business to Reliance Group.

In July of this year, CCI wrote to Amazon, accusing Amazon of concealing facts and making false submissions when seeking approval for the Future Coupons transaction.

Obviously, the CCI allegation messenger Amazon and Future Retail, the legal battle over selling retail assets to Reliance Group has become more complicated. Today, the legal battle between the two parties has been brought to the Supreme Court of India.

At that time, CCI stated in a letter to Amazon that when Amazon sought to approve the transaction, it did not disclose its strategic interest in future retail, thus concealing some facts about the transaction. CCI also stated that the reason for reviewing the materials submitted by Amazon was driven by future retail complaints.

In this regard, competition law expert Vaibhav Choukse (Vaibhav Choukse) said at the time that CCI rarely issues such notices. If CCI is not satisfied with Amazon’s response, it may fine it or even initiate an investigation into the transaction. .