Amazon-Future case: CCI filing may hinge on power to revoke order

The Competition Commission of India (CCI) is in the process of filing a written submission before the National Company Law Appellate Tribunal (NCLAT). The antitrust watchdog may communicate to the tribunal about holding the right to revoke its own decision if the information furnished to it is incomplete and/or incorrect, said people in the know.

NCLAT is hearing Amazon’s plea against CCI order on suspending its deal with Future Coupons (FCPL). Arguments from both sides concluded last week, it is learnt.

The tribunal has asked all parties, including Amazon, CCI, and Future, to file written submissions by April 25. The tribunal will then decide the fate of the two-year-old approval for the Amazon-Future deal.

The CCI submission may also highlight that while granting sanction to an entity for combination, it also reserves the right to revoke it in case of false statement and/or misrepresentation of facts. Amazon during the argument questioned the CCI order, arguing it did not have power to suspend or place its own order in abeyance.

The antitrust regulator might cite earlier judgments and observations about exercising power by an authority to amend, modify, or undo the decision made previously. 

In December, CCI had suspended the Amazon-FCPL deal, saying the US e-commerce major had suppressed information while seeking clearances for the transaction. It asked Amazon to furnish Form II within 60 days from receipt of order. A penalty of Rs 200 crore was also imposed on the US retail giant.

Form II is for greater disclosure of a deal if the merged entity breaches a certain threshold.

Amazon moved NCLAT, seeking interim stay on the CCI order, which was not granted. However, the tribunal agreed to hear its appeal.

Although there was no interim stay, Amazon did not comply with the CCI order to furnish Form II. The deadline has since expired. Legal experts say it may attract punitive action by the fair trade regulator.

“In case of non-compliance of an order of the CCI, the watchdog typically issues a show cause notice to the company, seeking why punitive action should not be taken under Section 42 of the Competition Act,” said Vaibhav Choukse, partner and head of practice (Competition Law) at J. Sagar Associates.

Talking about the consequences, Choukse said if CCI is not satisfied, it can impose a fine of up to Rs 1 lakh per day, a reply from the company followed by an oral hearing notwithstanding.

When contacted the Amazon on the deadline issue, the spokesperson said  "The matter is currently sub-judice, and the NCLAT has concluded hearing oral submissions of the parties. Parties have been directed to file written submissions by April 25,. The NCLAT will render its decision thereafter.

CCI during the argument is learnt to have presented all its findings before the tribunal and the reason behind the suspension.

It also argued that the representations by Amazon contradict its own internal documents. For instance, in its representation to CCI, the e-commerce behemoth said its investment in FCPL was solely governed by the terms and conditions of FCPL’s shareholder’s agreement with Amazon (SHA) and share-subscription agreement with Amazon.

This is contrary to what it represented to the tribunal, which said its investment is indirectly in Future Retail (FRL) and it has a right under FRL SHA.

“Amazon failed to disclose before CCI its real intent, motive, and purpose of executing the deal, which was to indirectly have control over FRL,” CCI argued during the hearing in the matter.