India’s antitrust watchdog suspends Amazon’s 2019 deal with Future Group

India’s antitrust watchdog on Friday suspended online retail giant Amazon’s 2019 deal with Future Group following a review of allegations that the US e-commerce firm had concealed information while seeking regulatory approval.

The Competition Commission of India also imposed a ₹200 crore penalty on Amazon.

The CCI decision could have far-reaching consequences on Amazon’s legal battles with now estranged partner Future. The US firm has for months successfully used the terms of its toehold $200 million investment to block Future’s attempt to sell retail assets to Reliance Industries for $3.4 billion.

In its 57-page order, the CCI said it considers it “necessary” to examine the combination deal “afresh”, adding that 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 order said.

Also read: Will expose Amazon before CCI, says Future director

All disclosure contraventions arise from a deliberate design by Amazon to suppress scope of 2019 deal, the CCI said.

Amazon warned the CCI that revoking the deal would send a negative signal to foreign investors and allow Reliance to “further restrict competition”.

The CCI review was triggered after a complaint from Future. The two sides have been at loggerheads since last year with the US company using the terms of its toehold investment to block debt-laden Future’s attempt to sell retail assets to Reliance.

While Future is staring at liquidation, the legitimacy of the $200 million deal could have far-reaching consequences for India’s retail sector.

If Amazon prevails, it will slow Reliance’s plan to acquire Future. And if the 2019 deal is voided, it could make it easier for Reliance to close the Future deal, hurting Amazon’s retail plans in the country.

An independent director from Future, Ravindra Dhariwal, had said in November that the company is collating information and will expose the details of “contradiction” and “misrepresentation” made by Amazon before the CCI.

Speaking to PTI, Dhariwal said the independent directors were collating all the information, going deeper into each and every representation that Amazon had made before the CCI and showing how its intent was totally contradictory.

“We are going out to point exactly to CCI, this is what they have told you and this is what the internal documents are saying. We are going to expose the details of contradiction and details of misrepresentation, which they have made,” Dhariwal said adding, “We are going to show the true face of Amazon to the whole world.”