CCI suspends Amazon’s 2019 deal with Future; Rs 200 cr penalty imposed on Amazon

The unprecedented step taken by the Competition Commission of India (

) could have far-reaching consequences on Amazon’s legal battles with now-estranged partner Future. The U.S. firm has for months successfully used the terms of its toehold $200 million investment in 2019 to block Future’s attempt to sell retail assets to Reliance Industries for $3.4 billion.

In a 57-page order, the CCI said it considers “it necessary to examine the combination (deal) afresh,” adding its approval from 2019 “shall remain in abeyance” until then. A penalty of Rs 200 crore has also been imposed on Amazon. “In exercise of the powers conferred under sub-section (2) of Section 45 of the Act, the Commission hereby directs Amazon to give notice in Form II within a period of 60 days from the receipt of this order, and, till disposal of such notice, the approval granted vide Order dated 28th November, 2019, in Combination Registration No. C-2019/09/688, shall remain in abeyance,” the CCI order read.

Amazon had “suppressed the actual scope” of the deal and had made “false and incorrect statements” while seeking approvals, the CCI order added.

The CCI’s order comes two weeks after the Supreme Court had given two weeks’ time to Amazon to file its response in a case. The CCI was giving its order in a March application filed by FCPL where the Future Group company had alleged the US e-commerce giant of concealing facts and flouting India’s foreign direct investment and foreign exchange laws while seeking the watchdog’s approval in 2019 for Amazon’s investment into FCPL.