Future Group Deal: CCI Cannot Revisit Approval, Amazon Says
Nothing was suppressed before the competition regulator, Amazon argued before the NCLAT.
The Competition Commission of India does not have the power to suspend its own orders or revisit prior approvals, Amazon.com NV Investment Holdings LLC argued before the National Company Law Appellate Tribunal on Friday.
The appellate tribunal began hearing the challenge by Amazon against the competition regulator’s decision, to suspend the 2019 approval to the transaction between Amazon and Future Group.
In December last year, the Competition Commission of India had suspended its approval to Amazon’s 2019 deal with Future Coupons Pvt. and imposed a Rs 200-crore penalty on the U.S. e-commerce major, saying it failed to identify and notify its strategic interest in Future Retail Ltd.
This is the first time it is happening in India that after two years the approval is suspended, Senior Advocate Gopal Subramanium told the appellate tribunal while arguing for Amazon.
Strategic Intent Was Clear From The Agreements: Amazon
Subramanium argued that there was no suppression of information by Amazon and that the CCI is not vested with powers that allows it to revisit approvals.
In 2019, Amazon had acquired a 49% stake in Future Coupons—a promoter entity of Future Retail. The competition regulator in its December order had noted that Amazon’s interest in Future Retail Ltd. — that owns the Big Bazaar chain of stores — was not adequately disclosed.
The strategic intent was written large in the agreement, Subramanium argued. The agreement mentioned the availability of a call option that would allow Amazon to purchase shares in Future Retail. As on date, the call option was not exercised and when it is done, the company will approach the regulator for the approval, he said.
Further, Amazon also questioned the regulator's power to suspend the approval. The power to keep an order in abeyance is a matter of positive law which the regulator has not been granted under the Competition Act, 2002.
...positive law is never implied and has to be by way of legislative prescription. A power of abeyance cannot be read without legislative prescription.Senior Advocate Gopal Subramanium
Even if one presumes that the regulator has the power to suspend, it can be exercised only under specific conditions. That being if the foundation on which the approval was granted had been displaced, Subramanium said.
That means that the combination must be causing an adverse effect on the competition and this was not the case, he added.
The NCLAT bench will continue to hear the case on Monday.