On Friday, the Competition Commission of India (CCI) announced that they have approved the $3.4 billion deal between Future Group and Reliance Retail. This has become troublesome for Amazon. Amazon has challenged the legality of this deal and called it a violation of a separate deal Future has with the American e-commerce conglomerate.
CCI is the Indian antibody trust that calls for enforcing The Competition Act, 2002. In their statement, they have confirmed Reliance’s acquisition of different bodies of Future Group. These include the retail, wholesale, logistics, and warehousing bodies of Future Group.
Mukesh Ambani’s Reliance Retail announced their intention to purchase Future’s various bodies back in August. The deal worth $3.4 billion is facing problems from Amazon, who owns a stake in one of Future’s company. Amazon claims that the Reliance-Future deal violates the deal they have with Future Group. Moreover, Amazon claims that the Indian firm has taken part in insider trading too.
Amazon has mentioned that their deal with Future Coupons forbids them from selling their assets to Reliance Retail.
Furthermore, Amazon managed to obtain an interim stay on the deal from the Singapore International Arbitration Centre (SIAC). This put the deal on temporary hold but Future has sought relief in the suit against Amazon. Future believes that the SIAC’s interim order won’t hold under the Indian Laws.
Future moved the Delhi HC against Amazon
On Thursday, Future Retail Ltd (FRL) stood before the Delhi HC. FRL argued that Amazon is misstating their legal rights. Shortly after that, the two Indian companies announced that they would work to close the deal “without any delay”.
Amazon has also gone to the CCI and Securities and Exchange Board of India (SEBI) to consider the SIAC order and block the deal.
Future Group is sparring with Amazon in a legal battle in Delhi. Appearing for FRL, Senior Advocate Harish Salve stood in front of Delhi HC and said, “If Amazon doesn’t have skin in the game, it can’t object to the scheme.”
Moreover, he said that Amazon’s behavior is somewhat like the East India Company of the 21t Century. He asserted that Amazon’s ideology exists in the fact that you can either do business with them or shut down completely. To this, Amazon has made no comments.
Future Retail has said that their contract with Reliance doesn’t collide with their deal with Amazon. And that if the deal doesn’t go through, many people would lose their jobs.
The CCI took this opportunity to review the entire value chain – wholesale, logistics, warehousing, and front-end retailing – of the retail industry. Their clearance for the deal indicates that they have concluded that the deal won’t cause any disadvantage on the competition in the relevant industry.