India’s competition regulator has revoked approval for Amazon.com’s alliance with local retail giant Future Group, alleging that the American company fibbed quite a lot in filings about the deal.
Future Group operates over 1,500 retail outlets in India, spanning fast-moving consumer goods, electronics, and even the Indian operations of iconic British newsstand-and-more business WH Smith.
In 2019 Amazon acquired 49 percent of Future Coupons, a payments provider that offers gift cards and other products. The deal was seen as one way for Amazon to get a foothold in India’s retail market and looked to have borne fruit as Amazon was named sole e-tailer for some Future Group brands.
But Future Group later sold its retail and wholesale operations to Reliance, the giant conglomerate so mighty that Google worked with it on a special version of Android tailored to Indian users.
Amazon objected to that deal on grounds its contracts with Future Group had been impinged, and recently won a stay of the Future/Reliance transaction.
Future then complained to the Indian Competition Commission (CCI) about its original deal with Amazon.
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Last Friday, the CCI issued an order [PDF] revoking its authorisation of the 2019 Amazon/Future Coupons deal.
The Commission’s reason for the revocation is, at the core, a belief that Amazon lied about the deal. The order does not pull its punches when describing Amazon’s behaviour.
Amazon had made false and incorrect representations and concealed/suppressed material facts in contravention of the provisions of the [Competition] Act.
The order contains more in the same vein: Amazon’s internal correspondence outlines plans to work with Future Coupons that the company didn’t disclose to the regulator.
Failure to disclose such matters is not permitted under India’s Competition Act, so the regulator has revoked its previous approval.
Indian media report they can find no previous example of the CCI revoking its approval of such a deal. Amazon’s reportedly digesting the CCI report before deciding on its next actions.
Amazon will also be reaching for its cheque book, as the CCI fined it around $26m for fibbing in its filings. ®