The National Company Law Appellate Tribunal (NCLAT) on Monday dismissed Amazon’s appeal against the Competition Commission of India’s (CCI) decision to delay clearance of the e-commerce giant’s transaction with Future Coupons.
“The appellant Amazon has not made full, complete, honest, and frank disclosures of pertinent materials,” the NCLAT stated. It had only provided little information about gaining its strategic rights and stake in FRL (Future Retail Ltd)” and completing the commercial arrangement.
The NCLAT bench of Justice M Venugopal and Ashok Kumar Mishra stated, “In this aspect, this appellate tribunal is in complete agreement with the position reached by the first respondent (CCI)…”
The CCI halted its clearance of Amazon’s agreement to acquire a 49 percent share in Future Coupons Pvt Ltd in December of last year (FCPL).
Amazon had withheld information when obtaining permissions for the transaction at the time, according to the regulator, who also fined the corporation Rs 202 crore.
This includes a Rs 200 crore penalty for Amazon for failing to notify the merger in the required terms, as well as two fines of Rs one crore each for concealing the merger’s true scope and purpose.
The NCLAT, on the other hand, somewhat modified the CCI decisions, saying that the penalty of Rs one crore per person was “on the high side” and reduced it to Rs 50 lakh per person.
“This appellate tribunal, based on the relevant facts and circumstances of the case, primarily the availability of competitions in the market and the financial health of the industry…imposes a penalty of Rs 50 lakh each as per sections 44 and 45 of the competition act 2002,” said the NCLAT, which ordered Amazon to pay Rs one crore within 45 days of the judgemenjudgmentnt.
The Rs 200 crore penalty issued on Amazon.com NV Investment Holdings LLC (Amazon), a direct subsidiary of Amazon.com Inc, for failing to announce the merger in the required terms was upheld by the NCLAT.
“With respect to the non-furnishing of information, namely the appellant’s (Amazon) omission for the lapse and for failure to notify the combination as required under section 6 (2) of the act (the Competition Act, 2002), this tribunal holds that appellant Amazon was at fault for failing to provide the relevant information on the combination.”
“This tribunal, in order to secure the goals of justice, is not displacing the imposition of a penalty of Rs 200 crore levied upon Amazon by CCI in the impugned judgement since the same is fair and logical as per section 43 (a) of the act,” NCLAT said orally in the virtual court.
In this case, a detailed decision is still pending.
“This panel orders Amazon to pay the sum of Rs 200 crore within 45 days of the date of this verdict,” the statement stated.
Future Retail Ltd is promoted by FCPL (FRL). Amazon had objected to FRL selling assets to Reliance Retail as part of a Rs 24,713-crore agreement that has now been scrapped.
The e-commerce behemoth objected to the sale because of a 2019 transaction in which it acquired a 49 percent share in FCPL.
In a statement, CAIT praised the NCLAT’s decision and stated that any attempt to monopolize Indian e-commerce and retail trade by anyone will fail under all circumstances.
“The NCLAT judgment vindicates CAIT’s position, which has consistently highlighted Amazon’s brazen anti-competitive practices and violations of law, including its deep-discounting, B2C e-commerce, and how it has entered the retail trading sector through its acquisitions of More Retail Ltd. and FRL,” the trader body said in a statement.
Featured Image: Pixabay
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