In a significant development, the Competition Commission on Friday suspended its more than two-year-old approval for Amazon's deal with Future Coupons and imposed a Rs 202 crore penalty on the e-commerce major for failure to furnish true and complete details about the transaction.

The ruling by CCI assumes significance amid the long-drawn bitter legal battle between Amazon and Future Group over the Indian entity's proposed Rs 24,713 crore-deal with Reliance Retail Ventures Ltd (RRVL).

Deals beyond a certain threshold require CCI nod and it is quite rare for the watchdog to suspend an approval.

In a 57-page order, the regulator noted that the contraventions of the competition law have arisen "from a deliberate design on the part of Amazon to suppress the actual scope and purpose of the combination".

Consequently, fines totalling Rs 2 crore have been imposed on Amazon.

For failure to notify the combination in the requisite terms, the watchdog has also slapped a penalty of Rs 200 crore.

The combination pertained to Amazon acquiring 49 per cent stake in Future Coupons through three levels of transactions.

The watchdog noted that Amazon had failed to disclose true and complete details of the purpose of the combination, which were required to be given while seeking the approval.

"... Amazon had supressed the actual scope of the combination and had made false and incorrect statements in relation to the BCAs (Business Commercial Agreements), which are intertwined into the scope and purpose of the combination," the order said.

CCI also said since the combination is between players who are known in the online marketplace and offline retailing and have contemplated strategic alignment between their businesses, it has decided to examine the combination afresh.

A time period of 60 days starting from the date of receiving the order has been given to Amazon to file a notice with "true, correct and complete information".

Till disposal of the notice, CCI said the approval granted for the combination on November 28, 2019 "shall remain in abeyance".

The parties involved in the combination were Amazon.com NV Investment Holdings LLC (Amazon) -- a direct subsidiary of Amazon.com Inc -- and Future Coupons.

"We are reviewing the order passed by the Competition Commission of India, and will decide on next steps in due course," an Amazon spokesperson said in a statement.

Amazon had initiated arbitration proceedings against Future Group with respect to proposed transfer of assets of Future Retail. Future Coupons told CCI that submissions made by Amazon before the regulator and the arbitrator were contradictory. Subsequently, CCI issued a show cause notice to Amazon in June this year.

"Further, Amazon had misrepresented that its decision to pursue the combination was based on the unique business model of FCPL (Future Coupons Pvt Ltd), and that FRL (Future Retail Ltd), a company with strong financials and futuristic outlook, is relevant to the combination only from the perspective of financial strength to FCPL," CCI said.

The watchdog also pointed out that it has no hesitation to hold that the conduct of Amazon amounts to "suppression and misrepresentation of the purpose of the combination, which is a material particular", adding that those are in contravention of competition norms.

"Similarly, the rights over FRL that were considered as strategic in the internal correspondence of Amazon, were represented as mere investor protection rights.

"Such repeated assertions, contrary to their actual purport, amount to statements that are false in material particular, in contravention of the provisions contained in clauses (a) and (b) of Section 44 and clause (a) of sub section (1) of Section 45 of the Act," the order said.

Citing Amazon's internal correspondence, CCI said it clearly highlights that the rights of Amazon over FRL "are at the heart of the negotiations and the need for FRL SHA (Shareholding Agreement) was to achieve the said objective of the combination".

Apart from not giving a single notice covering all the inter-connected steps of the combination, Amazon also failed to give true and complete disclosure with respect to substance of its combination. "... the FRL SHA was pursued to ensure that the business of FRL become a strategic asset for Amazon to expand and enhance its ultra-fast delivery services," CCI said.

The Confederation of All India Traders (CAIT) said suspension of the deal by CCI is a "landmark order" and that "Amazon stands fully exposed for its malpractices and bunch of lies at all levels together with continued violation of laws and the rules".

In a statement, CAIT National President B C Bhartia and Secretary General Praveen Khandelwal said the CCI order is the first concrete result of more than two years of rigorous efforts of the grouping for bringing misdeeds of Amazon to light. CAIT has also demanded immediate suspension of Amazon portal in India, the statement said.

CAIT had filed a Public Interest Litigation (PIL) before the Delhi High Court seeking an expeditious disposal of the matter that was being dealt by CCI.

While approving the deal in November 2019, CCI had also mentioned the order shall stand revoked if, at any time, the information provided by the acquirer was found to be incorrect.

"This approval should not be construed as immunity in any manner from subsequent proceedings before the Commission for violations of other provisions of the (Competition) Act," it had said.

On November 29, the Supreme Court gave two more weeks' time to Amazon to appear and argue before CCI which had declined adjournment of hearing in a case related to revocation of approval given to the e-retailer for the deal with Future Coupons.

In August 2019, Amazon had agreed to purchase 49 per cent in unlisted Future Coupons, which owns 7.3 per cent equity in listed Future Retail through convertible warrants, with the right to buy into the flagship Future Retail after a period of 3 to 10 years.

In August 2020, RRVL said it will acquire the retail and wholesale business, and the logistics and warehousing business of Future Group for Rs 24,713 crore.

The scheme of arrangement entails the consolidation of Future Group's retail and wholesale assets into one entity Future Enterprises Ltd and then transferring it to Reliance Retail.