The National Company Law Appellate Tribunal (NCLAT) on Monday upheld the Competition Commission of India’s (CCI’s) order passed on 17 December about non-disclosures by the US giant Amazon. The appellate body also asked the company to deposit ₹200 crores as a penalty within 45 days.
A bench led by Justice M. Venugopal in an oral pronouncement said “Amazon has failed to make fair and forthright disclosures about the 2019 deal with Future Group. The tribunal is in agreement with the CCI view and thereby directs Amazon to deposit 200 crores as a penalty”.
In January this year, US giant Amazon Holdings NV moved the NCLAT against the CCI order where the competition authority had put the approval for the Amazon and Future coupons deal in abeyance.
Confirming the CCI’s ruling, the NCLAT said that it is in full agreement with the anti-trust watchdog that Amazon had not made a full disclosure about its strategic interest in Future Retail Ltd – Future group’s publicly listed company which ran its flagship banner of Big Bazaar.
Amazon failed to notify the relevant information about the combination of the agreements, the NCLAT said agreeing with the CCI’s reasoning.
The American e-commerce giant had approached the NCLAT to challenge the CCI’s decision of December 2021 to keep its approval for the investment deal between Amazon and a Future group firm in abeyance.
Filings
Amazon had filed a petition with NCLAT to challenge the CCI decision in January 2022, and a hearing on the same began in February 2022.
The eCommerce giant argued that CCI can’t revisit its judgments. Senior counsel Gopal Subramaniam had said, “This is a serious matter.
This is for the first time in India that two years after approval has been granted and FDI has come in, the order has been kept in abeyance.”
Speaking on the same, Praveen Khandelwal, secretary-general, Confederation of All India Traders (CAIT) said, “We welcome the order which clearly states wrongdoings of Amazon. Any plot to capture the eCommerce and retail trade of India will not be succeeded. India is not a banana republic & laws are not weak.”
The almost-two-year-old tussle among the three parties- Amazon, Reliance Retail, and Future Retail has seen multiple twists and turns.
The companies almost looked set for an amicable closure of the case in March 2022, with Amazon’s counsel calling for talks. Shortly thereafter, Amazon alleged Reliance and Future of fraud and has been publicly slamming the two Indian companies ever since, starting with taking out front-page ads across multiple major dailies.
Last month, Amazon accused Future of foul play as Reliance aggressively took over 835 of its stores across the country. In a letter written to multiple stakeholders including two independent directors of Future, Amazon wrote, “You, as independent directors, have facilitated this fraudulent stratagem to defraud the Indian public and regulators.”
With the outcome of the NCLAT hearing, Amazon’s grip over Future Retail has slipped a bit more. It is to see now, how Amazon takes the order and what comes next from the e-commerce behemoth.
