The Competition Commission of India (CCI) has suspended the transaction between the US online giant Amazon and Future Coupons-which the competition regulating entity approved in the year 2019. Also, at the same time CCI has served a 60 days' notice to the online e-marketplace for concealing vital information when seeking approval for the Rs. 1400 cr. deal with Future Coupons. Future Coupons is a promoter company of Future Retail Limited.
In its order, the CCI points out that the failure to disclose the purpose of the transaction between the two entities in 2019 amounts to violations of the sub-section (2) of the Section 6 of the Competition Act and Regulation 5 and sub-regulations (4) and (5) of Regulation 9 of the Combination Regulations.
The watchdog has also levied a Rs 202 crore penalty on Amazon. "We are reviewing the order passed by the Competition Commission of India, and will decide on next steps in due course", an Amazon spokesperson told a leading publication.
"As regards failure to notify combination in terms of the obligation cast under Section 6(2) of the Act, Section 43A of the Act enables the Commission to impose a penalty, which may extend to one percent of the total turnover or the assets, whichever is higher, of such a combination. Accordingly, for the above-mentioned reasons, the Commission hereby imposes a penalty of INR Two Hundred Crore upon Amazon," the CCI stated in its order.
In respect of the non-disclosure, CCI stated that while Amazon mentioned that FCPL has a stake in Future Retail, it at the time of seeking approval for the deal,said that the e-tailer company is not targeting any commercial interest in Future Retail. But through the deal aims to capitalise on the FCPL's business for augmenting payment services globally and in India.
Also, the CCI imposed a fine to the tune of Rs. 202 crore on the US e-marketplace.