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“Revoking 2019 Future Retail Deal Will Boost Reliance Industries, Limit Its Competition”: Amazon Warns CCI

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If the 2019 deal is cancelled, it could make it easier for Reliance to close the deal in the future

Amazon has warned antitrust authorities that revoking its 2019 deal with Future Group will send a negative signal to foreign investors and allow domestic retail giant Reliance to “restrict competition.” more,” a legal document showed by Reuters.

Competition Commission of India (CCI) in reviewing pre-approval of the $200 million investment the US company made in a Futures unit in 2019, amid allegations that Amazon hid truth when seeking approval for a transaction.

The CCI review comes after a complaint from Amazon’s now estranged Future partner. The two sides have been at odds since last year with the US company successfully using the terms of an investment in 2019 to block its attempt to sell retail assets to Reliance Industries for $3.4 billion for $3.4 billion. Future is full of debt.

While Future is eyeing the liquidation, the legitimacy of the $200 million small deal could have far-reaching consequences for the country’s retail sector.

If Amazon prevails, it will slow Reliance’s plans to acquire Future at a time when the company is rapidly expanding into e-commerce.

And if the 2019 deal is scrapped, that could make it easier for Reliance to close the Futures deal, hurting Amazon’s retail ambitions, people familiar with the dispute said.

Amazon said in a confidential filing on December 12 that revoking CCI’s approval “is obligated to send a message to foreign investors that India’s economy and regulators are still underdeveloped.” to bring stability and certainty to foreign investments”.

Amazon in its 60-page submission went on to say that Future’s aim is to “relax its investment” to allow Reliance to strengthen its position “which will further limit competition in the retail market.” India”.

The fierce battle over Future Retail pits Jeff Bezos’ Amazon against Reliance, run by one of India’s richest men, Mukesh Ambani, in a bid for retail dominance in India.

Reliance is India’s No. 1 retailer with over 13,000 stores and is rapidly expanding into e-commerce.

Future Retail ranks second with more than 1,500 stores.

Amazon, Reliance and Future did not respond to requests for comment. CCI also did not respond.

No Information Concealed, CCI Has ‘No Power’

The Future-Reliance deal stalled as Amazon received favorable interim rulings from the Singapore arbitration and Indian courts. Future denies any wrongdoing and disputes continue to surface on numerous forums.

Amazon has argued that the terms agreed to in the 2019 deal to pay $200 million for a 49% stake in Future’s gift certificates unit prevented its parent company, Future Group, from selling the business. Future Retail Ltd to certain competitors, including Reliance.

In June, CCI sought an explanation from Amazon saying that it hid the actual aspects of the transaction by failing to disclose its strategic interest in Future Retail while seeking approval. favorable.

In its December 12 response to CCI – first reported here – Amazon argued that no information was withheld from CCI and that attorneys representing Future Group “have examined and approved ” all submissions.

“Didn’t conceal any material information,” Amazon’s filing states.

CCI’s 2019 approval order states its decision “will be revoked if, at any time, the information provided” is found to be inaccurate.

But Amazon in its submission argued that CCI had no authority to do so, saying its approval order under Indian law was final, without conditions.

“The power to revoke approval is a drastic power and is not available to a statutory authority unless expressly provided for” in Indian law, Amazon argued.

https://www.ndtv.com/business/revoking-2019-future-retail-deal-will-boost-reliance-industries-restrict-its-competition-amazon-warns-cci-2651305 “Revoking 2019 Future Retail Deal Will Boost Reliance Industries, Limit Its Competition”: Amazon Warns CCI

Emma James

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