The Supreme Court on Wednesday set aside the Rs 202 crore penalty imposed by the Competition Commission of India (CCI) on Amazon in connection with its 2019 investment in Future Coupons Private Limited (FCPL), holding that the regulatory action initiated against the e-commerce major was legally unsustainable.
The Bench of Justice Vikram Nath and Justice Sandeep Mehta directed that any amount deposited or recovered from Amazon pursuant to the impugned orders be refunded within a period of eight weeks. The Court further ordered that the refund shall carry simple interest at the rate of 6 per cent per annum from the date of deposit or recovery until actual repayment. In the event of delay beyond the stipulated period, the outstanding amount would attract penal interest at the rate of 9 per cent per annum until actual payment.
The controversy arose from Amazon’s 2019 acquisition of a 49 per cent equity stake in FCPL, a promoter group entity associated with Future Retail Limited (FRL). While seeking approval under the merger control framework prescribed under the Competition Act, 2002, Amazon represented before the CCI that the proposed combination was intended to strengthen FCPL’s gift card, loyalty card and digital payment services business.
The transaction structure also involved transfer of 2.52 per cent shareholding in Future Retail Limited to FCPL. Upon examination of the combination notice, the CCI, by order dated November 28, 2019, granted approval to the transaction after recording a prima facie satisfaction that the proposed combination was not likely to cause any appreciable adverse effect on competition (AAEC) within the relevant market in India.
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