An Indian antitrust watchdog has revoked the approval it had granted for Amazon’s 2019 investment in a Future Group unit and imposed a fine of about $26.3 million to the American e-commerce giant for concealing facts.
The Competition Commission of India said Amazon, which invested in Future Coupons in 2019, “suppress[ed] the actual scope and purpose of the combination” and failed to notify some of its commercial arrangements.
Reliance Retail, India’s largest retail chain, said a year ago it had reached an agreement with Future Group to acquire the latter’s retail and wholesaler business, as well as its logistics and warehousing business, for $3.4 billion. (CCI has approved the deal between the nation’s two largest retail chains.)
Things began to get complicated shortly afterwards. Amazon accused Future Group of violating its contract and approached the Singapore arbitrator to halt the deal between the Indian firms, saying it had the right for first investment in Future Group. The matter reached India’s Supreme Court, which in August ruled in favor of Amazon to stall the deal.
The CCI, which originally approved the deal between Amazon and Future, began reviewing it again following a complaint from Future.
“The conduct of Amazon in supressing relevant and material documents against the disclosure requirement under Item 8.8 of Form I is a contravention of clause (c) of sub-section (1) of Section 45 of the Act,” said CCI in a 59-page order on Friday. [H/T Reuters journalist Aditya Kalra.]
Amazon, which is required to pay the fine within 60 days, said in a statement that it was reviewing the order.
“We are reviewing the order passed by the Competition Commission of India, and will decide on next steps in due course,” a spokesperson told TechCrunch.
The development comes days after Amazon warned the Indian antitrust body that revoking its 2019 deal with Future Group would send a negative signal to foreign investors and enable Reliance, the owner of India’s largest retail chain, to “further restrict competition.”
Confederation of All India Traders, a lobby group that represents millions of retailers in the South Asian market, said CCI’s Friday order is “a landmark order and Amazon stands fully exposed for its mal-practices, and bunch of lies at all levels together with continued violation of laws and the rules.”