NCLAT rejects Amazon's plea against CCI order; asks to deposit over Rs 200 crore penalty

New Delhi: The National Company Law Appellate Tribunal (NCLAT) on Monday rejected Amazon's plea challenging the decision of fair trade regulator CCI to suspend the approval for the e-commerce major's deal with Future Coupons.

The NCLAT said "the appellant Amazon has not made full, whole, forthright and frank disclosures of relevant materials. It had furnished only limited disclosures pertaining to acquiring its strategic rights and interest in FRL (Future Retail Ltd)" and executing the commercial contract.

"In this regard, this appellate tribunal is in complete agreement with the view arrived at by the first respondent (CCI)... ", said the NCLAT bench comprising Justice M Venugopal and Ashok Kumar Mishra.

In December last year, the Competition Commission of India (CCI) suspended the approval given by it in 2019, for Amazon's deal to acquire a 49 per cent stake in Future Coupons Pvt Ltd (FCPL).

The regulator had said that Amazon suppressed information while seeking clearances for the transaction back then and also slapped a fine of Rs 202 crore on the company.

This includes a Rs 200 crore penalty for Amazon's to notify the combination in the requisite terms and two penalties of Rs one crore each for suppressing the actual scope and purpose of the combination.

However, NCLAT slightly modified the orders of CCI and said the penalty of Rs one crore each imposed was "on the higher side" and reduced it to Rs 50 lakh each.

"This appellate tribunal based on the relevant facts and circumstances of the case, mainly the availability of the competitions in the market and 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 NCLAT directing Amazon to pay Rs one crore within 45 days calculated from the date of passing of judgement.

But NCLAT upheld the Rs 200 crore penalty imposed on Amazon.com NV Investment Holdings LLC (Amazon) — a direct subsidiary of Amazon.com Inc — for failure to notify the combination in the requisite terms.