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In major blow to Amazon, CCI revokes approval for Future Coupons deal and imposes penalty

The Amazon-Future Coupons deal made in 2019 has since led to an intense back and forth between the two companies.

In a major blow to Amazon, the Competition Commission of India (CCI) has suspended the approval it gave for Amazon’s investment in Future Coupons in 2019 and has imposed a ₹200 crore penalty on the company for concealing information while seeking approval.

In its 57-page order, CCI said that it has to examine the deal afresh because Amazon suppressed the actual scope and purpose of the deal and made false representations while seeking approval.

Why this matters: This decision has significant ramifications on the ongoing legal battle between Future and Amazon because Amazon has so far used its investment in Future Coupons to block the sale of Future Retail to Reliance.


In November 2019, Amazon received approval to acquire a 49 percent equity in Future Coupons, the promoter entity of Future Retail, which operates 900 stores in India. Since Future Coupons owned a 7.3 percent stake in Future Retail, the deal gave Amazon a 3.58 percent stake in Future Retail. Then, in August 2020, Reliance announced that it will buy most of Future Group’s retail, wholesale, and logistics business in a deal worth Rs 24,713 crore. Amazon objected to this acquisition saying it had the right of first refusal because of its stake in Future Coupons. Both Amazon and Future have been engaged in a legal battle over this issue since October 2020.

Everything You Need To Know About The Amazon Vs Reliance And Future Retail Case and Round-Up Of All The Recent Updates In The Amazon Vs Future Retail Case

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What prompted CCI to investigate the deal?

CCI revisited the deal based on a complaint filed by Future Group. In a letter dated June 4, the anti-trust watchdog accused Amazon of concealing facts and making false submissions when it sought approval for the Future Coupons investment and asked the company for an explanation. At the heart of the issue is the allegation that Amazon, while seeking approval, did not disclose that it had a strategic interest in Future Retail through its investment in Future Coupons.

Later in November, Future Retail independent directors sent a letter to the CCI detailing Amazon’s wrongdoings and asked the agency to revoke the approval. The Confederation of All India Traders (CAIT) followed up a day later with a letter of its own to CCI and on November 15 filed public interest litigation at the Delhi High Court asking for an intervention. The Delhi High Court on November 16 ordered CCI to rule on revoking the approval given to Amazon’s investment in Future Coupons within two weeks.

Amazon then filed a petition with the Supreme Court asking it to pause CCI’s expedited review of the Future Coupons deal. CCI, however, noted in an internal document that it will not give extensions to Amazon to explain its position and will issue an order on the matter in due course.

Read: Future Retail Independent Directors Ask CCI To Revoke Approval Of Amazon’s Investment In Future Coupons

Revoking deal would hurt competition: Amazon to CCI

Amazon in a filing made on December 12 warned CCI that revoking the Future Coupons deal will allow Reliance to “further restrict competition” and send the wrong signals to foreign investors, Reuters reported.

“[The deal] is bound to send a message to foreign investors that the economy and regulatory landscape of India are still not developed enough to provide stability and certainty to foreign investments”. — Amazon filing

Amazon further argued that no information was concealed when it sought approval and CCI does not have the power to revoke the deal:

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“The power to revoke an approval is a drastic power and is not available to a statutory authority unless expressly provided.”

However, the approval from CCI in 2019 actually came with a caveat that it can stand revoked if at anytime the agency finds that the information provided was incorrect.

What is the current status of the Reliance, Future deal?

The sale of Future Retail to Reliance is currently on hold as Amazon won a favourable ruling from the Singapore arbitration court on October 21. The court had ruled that Future Retail is a party to the agreements signed between Amazon and Future Coupons and must participate in the arbitration process. The Supreme Court had earlier in August ruled that the Singapore arbitrator’s award can be legally enforced in India, making this latest ruling valid too.

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