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Amazon Appeals Indian Watchdog’s Suspension of Future Deal

Amazon’s tussle with Reliance Industries over the fate of Indian retail conglomerate Future Group has taken yet another legal turn.

In December, the Competition Commission of India (CCI) suspended its approval of Amazon’s initial 49 percent investment in Future subsidiary Future Coupons, thus hindering the e-commerce giant’s attempts to block the $3.4 billion sale of Future’s retail assets to Reliance. Upon the suspension from the regulatory body, a New Delhi court halted the arbitration proceedings between the two sides.

According to a report from Reuters, Amazon fired back on Saturday night with an appeal of its own against the CCI suspension decision at India’s National Company Law Appellate Tribunal (NCLAT).

Separately, Amazon also reportedly filed a challenge in the Supreme Court against the Delhi court decision in which judges last week said Future-Amazon arbitration proceedings must remain on hold until Feb. 1 in light of the deal’s antitrust suspension.

Amazon did not immediately respond to a request for comment. Reuters says both of the challenges are likely to be heard in the coming days.

When it suspended the original Amazon-Future deal’s approval in December, the CCI said that the e-commerce giant deliberately sought to suppress information about the scope and purpose of the deal. Future has argued Amazon no longer has any legal basis to pursue the dispute.

Along with temporarily suspending the deal, the antitrust regulator imposed a penalty of 200 million crore ($27 million) on Amazon to be paid within 60 days of receipt of the order, citing that the company did not disclose its interest in Future Retail Limited while seeking approval for its investment in parent company Future Coupons.

Amazon has long argued that Future violated the terms of its 2019 deal, when the tech titan invested approximately $200 million in the retailer, in deciding to sell retail assets to Reliance. The investment included clauses saying the Indian group couldn’t sell its retail assets to anyone on a “restricted persons” list including Reliance Industries CEO Mukesh Ambani, India’s richest person. The deal specified any disputes would be arbitrated under Singapore International Arbitration Centre (SIAC) rules.

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The Seattle firm’s position has so far been backed by the Singaporean arbitrator. In October 2020, SIAC ordered an injunction to prevent Future from selling any retail assets to Reliance.

The Competition Commission of India (CCI) nevertheless approved the deal the next month, before it was blocked again in February 2021 by a Delhi high court, leading to an appeal from Future Group. But the next week, a two-judge bench hearing the appeal put the ruling on hold. Another bench order in March allowed the Reliance-Future deal to go through, before Amazon petitioned India’s Supreme Court, calling the deal “illegal” and “random.” Future has continued to deny any wrongdoing.

In August, the Supreme Court then ruled in favor of Amazon, upholding the Singapore emergency arbitrator award to stall the merger. But in a major relief to Future Group, the court stayed proceedings before a Delhi high court in September. The court also directed the NCLAT, CCI, and the Securities and Exchange Board of India to not pass any final order in relation to the dispute for four weeks, before giving another extension in November.

The deal has significant implications for all parties, particularly since Amazon has made Indian expansion a major global priority. And for Reliance Retail, already the largest retail operator in India with 12,200 stores, it would be gaining even wider footprint with a successful Future deal. If it acquired the retail, logistics and warehouse operations from Future Group, the company would have 1,700 more brick-and-mortar stores under the Big Bazaar, Central and Foodhall banners.

Amazon has argued that the deal would restrict competition in the Indian retail market. Ironically, the U.S.-based Big Tech firm has faced antitrust accusations in the U.S and abroad, largely for allegations that it has skirted regulations and given preferential treatment to certain sellers on its marketplace.

Various reports from Reuters have detailed information from several internal documents from Amazon regarding the company’s business tactics in India and what it has done to attain market share. The most recent report, published in mid-October, asserted that Amazon leveraged third-party data to create its own private-label products—a claim U.S. lawmakers and Amazon sellers alike have long held—and manipulate search results to boost its own products in India. The report even got the attention of former presidential candidate Sen. Elizabeth Warren (D.-Mass.), who urged lawmakers to break up the e-commerce giant.