NCLAT upholds CCI’S order on Amazon
MUMBAI: The National Company Law Appellate Tribunal (NCLAT) on Monday upheld the Competition Commission of India’s (CCI’S) December 17 order pertaining to non-disclosures by Amazon.com Inc., dealing a setback to the US online retailer.
The appeals tribunal directed the company founded by Jeff Bezos to deposit the ₹200 crore penalty imposed by CCI within 45 days. Amazon can, however, challenge the order in the Supreme Court. “Amazon has failed to make fair, frank, and forthright disclosures pertaining to the 2019 deal with Future Group. The tribunal is in agreement with the CCI view and thereby directs Amazon to deposit ₹200 crore as penalty,” the tribunal bench led by Justice M Venugopal ruled in an oral pronouncement.
The bench said the tribunal completely agrees with the competition watchdog that Amazon furnished limited disclosures about its acquisition of strategic rights and interests in Future Retail Ltd.
In its order, the tribunal said that “In so far as the aspect of non-disclosures by Amazon, this tribunal aptly points out that Amazon was required to reveal ‘economic and strategic’ purpose, including business objective and rationale for each of the parties to the combination and the manner in which they are intended to be achieved of the combination.”
The tribunal pointed out that Amazon, however, said that it was investing in Future Coupons Pvt. Ltd (FCPL) with a view to strengthen and augment the business of Future Coupons including the marketing and distribution of loyalty cards, corporate gift cards and reward cards to the corporate customer and unlock the value in the company.
“It seems that Amazon has an uphill task ahead of itself as it would need to convince the Supreme Court to interfere with the concurrent findings of the CCI and the NCLAT,” said Sandeep Bajaj, managing partner, PSL Advocates and Solicitors. In January, Amazon had approached the NCLAT against the CCI order where the competition authority had put the approval for the Amazon and Future Coupons deal in abeyance. The antitrust watchdog fined Amazon ₹200 crore for misrepresenting and suppressing information while seeking regulatory approval in 2019 to buy a stake in Future Coupons.
According to CCI’S December order, disclosing significant facts and particulars is critical because they allow the commission to understand the commercial and economic dimensions of the merger and determine an appropriate framework for assessing the matter. The watchdog also said the misleading submissions, false statements, omissions, and suppression of material particulars, facts, and documents have denied and disabled the commission from assessing the effects of the actual combination, with a particular focus on the actual intended objectives.
The move follows a Delhi high court judgement on January 5 that suspended Amazon’s arbitration proceedings in Singapore against estranged partner Future Group for contract violations.