The Indian Competition Commission (CCI) revoked authorization for the alliance between Amazon and the local e-tailer Future Group. Allegedly, Amazon has concealed and falsified information related to the deal.
In 2019, Amazon acquired 49% of the payments and gift cards provider Future Coupons Private Ltd. According to the CCI, the US ecommerce giant misled it that its interest was solely in FCPL’s affairs.
Instead, the CCI claims, Amazon’s ultimate goal is to gain more influence on the Indian retail market. And there are some facts supporting this accusation.
For starters, Future Group holds 1,500 retail stores in India. Plus, with the 2019 acquisition, Amazon also secured a share at Future Retail Ltd (FRL). But most importantly, the CCI claims it discovered internal emails revealing Amazon’s intentions to acquire FRL.
In 2020, however, Future decided to sell its retail and wholesale assets to Reliance Retail. This move would interfere with Amazon’s alleged future acquisition plans. As such, the company leveraged its 3% share at FRL to win a stay on the deal.
In December 2021, Future Coupon Private Limited (FCPL) and the Confederation of All India Traders (CAIT) complained about Amazon’s misleading practices.
As a result, the CCI revoked its approval of the 2019 deal. In addition, it fined the company $26 million for withholding important information.
An increase in Amazon’s influence on the Indian retail market would be extremely lucrative for the business.
The company hasn’t acted in response to CCI’s actions yet. That said, it is likely to challenge the order. The case is still pending before India’s Supreme Court.