Editor's Pick: CCI freezes Amazon-Future deal, slaps fine

The Competition Commission of India (CCI) on Friday froze its approval given in November 2019 to Amazon’s investment in a Future Group unit on the grounds that the U.S. e-commerce had suppressed the scope and full details of its investment while seeking regulatory approval. The antitrust regulator also imposed a penalty of Rs. 200 crore on Amazon for failing to notify the details of its ‘combination’, as required in law. It also imposed a separate penalty of Rs. 2 crore for suppressing the actual scope and purpose of the combination, a term used in competition law for acquisition, merger or amalgamation of two or more enterprises. The Commission had on November 28, 2019, granted approval for Amazon.com NV Investment Holdings’ proposal to acquire 49% in Future Coupons Private Ltd. The CCI decision further roils the legal landscape as Amazon seeks to block the Future Group’s 2020 decision to sell its retail assets to Reliance Industries. In August 2019, Amazon had signed a $200 million deal to acquire a 49% stake in Future Coupons, which owns 7.3% equity in Future Retail, with the right to buy into Future Retail after a period of three to 10 years. In August 2020, Reliance entered into a deal with Future Group to acquire its retails assets for Rs. 24,713 crore. Amazon contested the deal, arguing that the terms agreed in its 2019 deal prevented Future Group from selling its retail business to certain rivals, including Reliance. After the CCI ruling, Amazon has 60 days to pay the monetary penalty. It has the same period to notify the combination afresh with “true, correct and complete information”. The Commission said it would examine the Amazon-Future deal afresh, “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.” Reuters reported that Amazon said it never concealed material information, warning the watchdog that the deal’s revocation would send a negative signal to foreign investors. The Future-Reliance deal has been on hold for months as Amazon got favourable rulings from a Singapore arbitrator and Indian courts. Future denies any wrongdoing. In August, the Supreme Court in a 103-page judgment had upheld the validity and enforceability of a Singapore-based Emergency Arbitrator award, which had restrained Future Retail from going ahead with the disputed transaction with Reliance. With global investors watching government policies on trade, and India already having run-ins with companies like Cairn Energy and Vodafone, the scuppering of the Amazon-Future deal is an important story. The Hindu Editorials For an honest broker: On Russia and India-China ties When the chips are down: On India’s Semiconductor Mission Was this newsletter forwarded to you? Head over to our newsletter subscription page to sign up for Editor's Pick and more. Click here Try out The Hindu's daily news quiz Who is the Chief of the Naval Staff? 1. Karambir Singh 2. R. Hari Kumar 3. V.R. Chaudhari 4. M.M. Naravane To find out the answer and play the full quiz, click here. [logo] Editor's Pick 18 DECEMBER 2021 [The Hindu logo] In the Editor's Pick newsletter, The Hindu explains why a story was important enough to be carried on the front page of today's edition of our newspaper. [Arrow]( [Open in browser]( [Mail icon]( [More newsletters]( CCI freezes Amazon-Future deal, slaps fine [CCI freezes Amazon-Future deal, slaps fine] The Competition Commission of India (CCI) on Friday [froze its approval given in November 2019 to Amazon’s investment]( in a Future Group unit on the grounds that the U.S. e-commerce had suppressed the scope and full details of its investment while seeking regulatory approval. The antitrust regulator also imposed a penalty of Rs. 200 crore on Amazon for failing to notify the details of its ‘combination’, as required in law. It also imposed a separate penalty of Rs. 2 crore for suppressing the actual scope and purpose of the combination, a term used in competition law for acquisition, merger or amalgamation of two or more enterprises. The Commission had on November 28, 2019, granted approval for Amazon.com NV Investment Holdings’ proposal to acquire 49% in Future Coupons Private Ltd. The CCI decision further roils the legal landscape as Amazon seeks to block the Future Group’s 2020 decision to sell its retail assets to Reliance Industries. In August 2019, Amazon had signed a $200 million deal to acquire a 49% stake in Future Coupons, which owns 7.3% equity in Future Retail, with the right to buy into Future Retail after a period of three to 10 years. In August 2020, [Reliance entered into a deal with Future Group]( acquire its retails assets for Rs. 24,713 crore. Amazon contested the deal, arguing that the terms agreed in its 2019 deal prevented Future Group from selling its retail business to certain rivals, including Reliance. After the CCI ruling, Amazon has 60 days to pay the monetary penalty. It has the same period to notify the combination afresh with “true, correct and complete information”. The Commission said it would examine the Amazon-Future deal afresh, “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.” Reuters reported that Amazon said it never concealed material information, warning the watchdog that the deal’s revocation would send a negative signal to foreign investors. The Future-Reliance deal has been on hold for months as Amazon got [favourable rulings from a Singapore arbitrator]( and Indian courts. Future denies any wrongdoing. In August, the Supreme Court in a 103-page judgment had upheld the validity and enforceability of a Singapore-based Emergency Arbitrator award, which had restrained Future Retail from going ahead with the disputed transaction with Reliance. With global investors watching government policies on trade, and India already having run-ins with companies like Cairn Energy and Vodafone, the scuppering of the Amazon-Future deal is an important story. [underlineimg] The Hindu Editorials [Arrow][For an honest broker: On Russia and India-China ties]( [Arrow] [When the chips are down: On India’s Semiconductor Mission]( [underlineimg] Was this newsletter forwarded to you? Head over to our newsletter subscription page to sign up for Editor's Pick and more. [Click here]( [underlineimg] Try out The Hindu's daily news quiz Who is the Chief of the Naval Staff? 1. Karambir Singh 2. R. Hari Kumar 3. V.R. Chaudhari 4. M.M. Naravane To find out the answer and play the full quiz, [click here](. 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