CCI accuses Amazon of hiding facts in Future deal
In the show-cause notice, the regulator said, “The representations and conduct of Amazon before the Commission amounts to misrepresentation, making false statements and suppression or/and concealment of material facts“
Competition Commission of India (CCI) has accused Amazon of concealing facts and making false submissions when it sought approval for an investment in Future Group. In a show cause notice, CCI said that Amazon hid factual aspects of the transaction by not revealing its strategic interest in Future Retail when it sought approval for the deal.
In the show-cause notice, the regulator said, “The representations and conduct of Amazon before the Commission amounts to misrepresentation, making false statements and suppression or/and concealment of material facts.” It further asked Amazon why it should not take action and penalise the company.
Amazon is yet to respond to the notice.
The show-cause notice only complicates the legal battle between Amazon and Future over the latter’s decision to sell its retail assets to Reliance Industries. Amazon objected to the deal, invoking the terms agreed upon in the 2019 deal to pay $192 million for 49 per cent in Future’s gift voucher unit that prevents its parent, Future Group, from selling its business to other companies, through a right of first refusal clause.
The CCI’s 2019 approval order stated that its decision “shall stand revoked if, at any time, the information provided” is found to be incorrect.
The regulator’s notice compared three sets of submissions Amazon made to CCI in 2019 with submissions made later to other legal forums. In its submission to CCI, Amazon had explained its interest in Future’s coupon unit as one that would address gaps in India’s payments industry. In submissions to other legal forums, Amazon had disclosed that the foundation of its relationship with Future Coupon was certain special rights it obtained over Future Retail, according to CCI’s notice.
“Amazon has concealed its strategic interest” in Future Retail, the letter said, adding: “Such interest and the purpose of the combination …was not disclosed to the Commission despite specific requirements.”
The CCI also objected to one section of a submission where Amazon had told the regulator it had nothing to do with one particular legal agreement that two Future entities had signed between themselves days ahead of its 2019 deal. But Amazon later claimed before an arbitrator that the agreement was an “integrated part” of the transaction, the letter said.
