CCI defends its December order on Amazon-Future deal

The Competition Commission of India (CCI) on Thursday defended its December 2021 order that kept in abeyance an earlier order approving Amazon’s deal with Future Coupons (FCPL), saying that the US retail major misled the commission on the purpose of the combination through false statements and material omissions.

“In stark contrast to internal correspondence of Amazon, the disclosures did not indicate a possibility of the combination being pursued by Amazon for having a ‘foot-in-door’ in the Indian retail sector, acquire strategic rights over Future Retail (FRL) or entering into any commercial partnership with FRL to expand the ability of Amazon in ultra-fast delivery services,” additional solicitor-general N Venkataraman, representing the CCI, argued.

Following the CCI’s order of abeyance, Amazon had moved the National Company Law Appellate Tribunal (NCLAT) challenging the order. In its pleadings before the appellate tribunal, Amazon described the CCI’s December order as “erroneous” on the allegation that Amazon did not make the required disclosures on the deal. Amazon also said that the regulator does not have the power to keep its own order in abeyance.

Venkataraman said if a party conceals or suppresses or misrepresents to the commission the scope and purpose of the combination and obtains approval, the same would effectively amount to approval having been obtained by way of fraud.

“The Commission has the power to review or recall if the order is obtained by fraud or misrepresentation. Fraud vitiates every solemn act. CCI’s power to approve a combination includes the power to undo the approval,” he said to justify the CCI’s order of keeping the deal in abeyance.

Amazon had represented before the commission that its rationale behind the combination was the business potential of FCPL to create long-term value and provide return on the investment made by Amazon.

However, the internal correspondence of Amazon clearly shows different purposes for envisaging the combination i.e. foot-in-door in the Indian retail sector, secure rights over FRL that are considered as strategic by Amazon and commercial agreements between the retail business of Future Group and Amazon.