In a major setback to Amazon, the National Company Law Appellate Tribunal (NCLAT) on Monday rejected the US e-commerce giant’s appeal against an antitrust suspension of its investment deal with Future Group, saying the retailer had not made full disclosures at the time of seeking approval.
NCLAT also upheld a Rs 200 crore penalty imposed on Amazon by the Competition Commission of India (CCI) and asked the e-commerce giant to deposit the same in 45 days.
It supported the CCI findings that Amazon didn’t make full disclosures regarding the deal with Future Retail subsidiary – Future Coupons Pvt Ltd (FCPL).
The competition watchdog had on December 17, 2021, levied a Rs 200 crore penalty on Amazon and suspended its deal with Future, stating that the US firm deliberately suppressed the actual scope and purpose of the 2019 investment and made false and incorrect statements. Amazon had challenged the decision, arguing that it had not concealed any information.
Amazon.com NV Investment Holdings LLC (Amazon), a direct subsidiary of Amazon.com Inc, had in 2019 acquired 49 per cent shareholding in FCPL, which in turn held 9.82 per cent interest in FRL.
Citing its indirect shareholding in FRL, Amazon had opposed the sale of its retail assets to Reliance Industries for Rs 24,713 crore.
The CCI order had stated that Amazon had not disclosed its interest in FRL while seeking approval for its investment in FCPL.
NCLAT upheld the CCI view but reduced a separate penalty of Rs 1 crore each imposed under Sections 44 and 45 to Rs 50 lakh each. Amazon has been directed to pay the penalties and file a fresh Form 2 within 45 days.
“This appellate tribunal based on the relevant facts and circumstances of the case, mainly the availability of the competitions in the market and financial health of the industry... imposes a penalty of Rs 50 lakh each as per sections 44 and 45 of the competition act 2002,” NCLAT said directing Amazon to pay Rs 1 crore within 45 days calculated from the date of passing of judgment.
But NCLAT upheld the Rs 200 crore penalty imposed on Amazon.com NV Investment Holdings LLC (Amazon) – a direct subsidiary of Amazon.com Inc – for failure to notify the combination in the requisite terms.