The Supreme Court on Wednesday overturned a June 2022 ruling by the National Company Law Appellate Tribunal (NCLAT) that had dismissed Amazon’s appeal against the suspension of its investment agreement with Future Group on anti-trust grounds. A bench comprising Justices Vikram Nath and Sandeep Mehta also quashed the Competition Commission of India’s (CCI) December 17, 2021, order, which had imposed a Rs 202 crore penalty on the US e-commerce major and put its deal with Future Group on hold.
“Considering the findings recorded above, the appeal is allowed. The impugned judgment dated June 13, 2022, passed by the NCLAT and the order dated December 17, 2021, passed by the CCI are hereby set aside,” Justice Nath said while delivering the verdict. The apex court further directed that any amount deposited or recovered from Amazon in connection with these orders must be refunded within eight weeks.
The ruling came on Amazon’s plea challenging the NCLAT’s June 2022 decision, which had upheld the CCI’s action against the company.
What Was The Case?
The dispute traces back to Amazon’s $200 million investment in Future Group’s gift voucher arm in 2019. The US e-commerce company maintained that the agreement granted it certain contractual protections, including restrictions on Future Retail’s sale of its assets to specific players, such as Reliance Industries.
On December 17, 2021, the Competition Commission of India suspended the approval it had granted over two years earlier for Amazon’s acquisition of a 49 per cent stake in Future Coupons Pvt Ltd (FCPL). The regulator reviewed allegations that Amazon had not fully disclosed relevant details while seeking clearance for the transaction.
The CCI also imposed penalties of Rs 202 crore, alleging that Amazon failed to clearly communicate the broader scope and strategic intent behind the deal, particularly its interest in Future Retail, the operator of the Big Bazaar stores. Of the total amount, Rs 200 crore and Rs 2 crore were levied separately under different legal provisions linked to transaction reporting requirements. The National Company Law Appellate Tribunal later upheld the order.
After Amazon did not deposit the penalty by mid-February 2022, the CCI issued a recovery notice on April 25 that year, prompting the company to move to the Supreme Court.
(With PTI Inputs)
