In a major setback to Amazon, the National Company Law Appellate Tribunal (NCLAT) on Monday rejected the US e-commerce giant’s appeal against an antitrust suspension of its investment deal with Future Group, saying the retailer had not made full disclosures at the time of seeking approval.
The NCLAT also upheld a Rs 200-crore penalty imposed on Amazon by the Competition Commission of India (CCI) and asked the e-commerce giant to deposit the same in 45 days.
It supported the CCI findings that Amazon didn’t make full disclosures regarding the deal with Future Retail subsidiary — Future Coupons Pvt Ltd (FCPL).
In its order, the NCLAT said, “Amazon has not made full, whole, forthright and frank disclosures of relevant materials. It had furnished only limited disclosures pertaining to acquiring its strategic rights and interest in FRL (Future Retail Ltd)” and executing the commercial contract.
“In this regard, this appellate tribunal is in complete agreement with the view arrived at by the first respondent (CCI),” said the NCLAT bench comprising Justice M. Venugopal and Ashok Kumar Mishra.
The competition watchdog had on December 17, 2021, levied a Rs 200-crore penalty on Amazon and suspended its deal with Future, stating that the US firm deliberately suppressed the actual scope and purpose of the 2019 investment and made false and incorrect statements.
Amazon had challenged the decision, arguing that it had not concealed any information. Amazon.com NV Investment Holdings LLC (Amazon), a direct subsidiary of Amazon.com Inc, had in 2019 acquired 49 per cent shareholding in FCPL, which in turn held 9.82 per cent interest in FRL.
Citing its indirect shareholding in FRL, Amazon had opposed the sale of its retail assets to Reliance Industries for Rs 24,713 crore. The CCI order had stated that Amazon had not disclosed its interest in FRL while seeking approval for its investment in FCPL.
“As regarding the non-furnishing of the information, namely the appellant (Amazon) omission for the lapse and for failure to notify the combination as per the obligatory required under section 6 (2) of the act (the Competition Act, 2002), this tribunal holds that appellant Amazon was at the failure to provide the information,” the NCLAT said.
