American e-Commerce giant Amazon’s battle to dominate India’s market has been impacted by a decision made by the country’s antitrust watchdog last week.
Indian antitrust watchdog revoked the approval it had granted for Amazon’s 2019 investment in a Future Group unit and imposed a fine of about $26.3 million to the American e-commerce giant for concealing facts.
Who controls the largest share of India’s huge market has been at the center of controversies between Amazon and indigenous companies for a while now, before the antitrust decision shattered whatever chance was left for the American company.
Tekedia Mini-MBA edition 14 (June 3 – Sept 2, 2024) begins registrations; get massive discounts with early registration here.
Tekedia AI in Business Masterclass opens registrations here.
Join Tekedia Capital Syndicate and invest in Africa’s finest startups here.
The Competition Commission of India said Amazon, which invested in Future Coupons in 2019, “suppress[ed] the actual scope and purpose of the combination” and failed to notify some of its commercial arrangements, TechCrunch reports.
Reliance Retail, India’s largest retail chain, said a year ago it had reached an agreement with Future Group to acquire the latter’s retail and wholesaler business, as well as its logistics and warehousing business, for $3.4 billion. (CCI has approved the deal between the nation’s two largest retail chains.)
Things began to get complicated shortly afterwards. Amazon accused Future Group of violating its contract and approached the Singapore arbitrator to halt the deal between the Indian firms, saying it had the right for first investment in Future Group. The matter reached India’s Supreme Court, which in August ruled in favor of Amazon to stall the deal.
The CCI, which originally approved the deal between Amazon and Future, began reviewing it again following a complaint from Future.
“The conduct of Amazon in supressing relevant and material documents against the disclosure requirement under Item 8.8 of Form I is a contravention of clause (c) of sub-section (1) of Section 45 of the Act,” said CCI in a 59-page order on Friday. [H/T Reuters journalist Aditya Kalra.]
Amazon, which is required to pay the fine within 60 days, said in a statement that it was reviewing the order.
“We are reviewing the order passed by the Competition Commission of India, and will decide on next steps in due course,” a spokesperson told TechCrunch.
The development comes days after Amazon warning the Indian antitrust body that revoking its 2019 deal with Future Group would send a negative signal to foreign investors and enable Reliance, the owner of India’s largest retail chain, to “further restrict competition.”
India launched a multibillion dollar digital economy campaign that has been embraced largely by American companies, with members of the Big Tech betting billions of dollars in investment in the Asian country.
However, the government has been accused of favoring indigenous companies over foreign companies, a point Amazon has strongly emphasized that it will dampen India’s chances of actualizing its digital economic dream.