The Supreme Court of India halts the Competition Commission of India’s (CCI) order asking Amazon to pay a penalty of Rs 202 crore ($27 million) for buying a 49% stake in a Future Group entity in 2019. The order was given by Justice Dinesh Maheshwari, who chaired the SC bench in the case. He noted the totality of the situation and ordered that no coercive steps shall be taken against Amazon until the next date of hearing on July 17.
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Initially, the CCI approved Amazon’s 49% acquisition of Future Coupons (FCPL). Reviewing the situation, it was discovered that material was withheld while obtaining regulatory approval for the purchase, which led to accusations being made against Amazon. As a result, the CCI slapped a penalty on the e-commerce firm for its inability to come clean on the actual scope and purpose of the deal.
Amazon was required by the order to make the penalty payment by mid-February 2022. The penalties were imposed in two parts in accordance with separate sections of the law: Rs 200 crore ($27 million) and Rs 2 crore ($270,000) were imposed on Amazon.
The Future Group and Amazon have been in a legal battle since October 2020. It all started when Singapore’s Emergency Arbitrator ordered Future Retail Limited (FRL) to restrain it from going ahead with its deal with Reliance Retail. According to the Economic Times (ET) report, Amazon had invested in Future Coupons, which in turn owns a 7.3% stake in FRL. This made Amazon a party to the agreement between FRL and Reliance Retail. Amazon, therefore, sought arbitration and an interim injunction to prevent the deal from proceeding.
The legal battle continued, and the CCI (Competition Commission of India) eventually imposed a penalty on Amazon for concealing information while seeking regulatory approval. Amazon challenged the CCI order in the Supreme Court, which has now stayed the order until the next hearing.
In conclusion, the legal battle between Future Group and Amazon is ongoing, and the CCI’s penalty on Amazon has been temporarily stayed by the Supreme Court. The matter will be heard again on July 17, and until then, no coercive steps will be taken against Amazon.
