What’s all the fuss with Amazon, Future Retail & the Indian competition watchdog CCI?

Updated: Dec 31, 2021

In a battle between Amazon & Future Group over the duo’s 2019 acquisition deal, the former has been left bruised. India’s Competition Commission of India (CCI) made some scathing observations and revoked the approval it had earlier granted.

  • The US e-commerce behemoth has been fined ₹200cr for hiding details to seek CCI's approval for the deal.

  • The revocation may pave way for Reliance, Amazon’s biggest rival in India, to acquire Future Retail.

Background Story

To understand what’s all the commotion about, let’s rewind to 2019.

  • It was in this year, that Amazon bought a 49% stake in Kishore Biyani-promoted Future Coupons, a promoter entity of Future Retail. The buyout was for a whopping ₹1,500cr.

  • This in turn gave the e-commerce giant an indirect ~3.6% stake in Biyani’s flagship, Future Retail.

  • The deal gave Amazon the option to buy Future Retail, should it go for sale, within 3-10yrs.

Pretty straightforward right? Not to the CCI though.

Bone of Contention

  • A trade body revealed excerpts of email conversations between top Amazon executives, saying that the e-commerce giant planned to own Future Retail indirectly.

  • Future Retail's independent directors requested CCI to revoke the contract between Amazon & Future Coupons.

  • CCI, in its investigation, found that Amazon had made false claims while seeking the authority’s approval its stake-purchase in Future Coupons. The regulatory body also alleged that Amazon hid the actual scope and purpose of the agreement, alluding to its strategic interest in buying Future Retail.

  • CCI's ruling has now put the investment deal on hold, stating that the commission may need to re-examine the parties' agreement for approval. To add to Amazon’s embarrassment, CCI fined it to the tune of ₹202cr.

Future Group Vs Amazon Vs Reliance

  • After claiming victory in the telecom business, Mukesh Ambani intended to become the king of Retail, just like his competitors Radhakishan Damani (DMART) and Jeff Bezos (Amazon).

  • Reliance has already established a retail network, but expanding across the country was a massive challenge for the corporation. On the other hand, Future Groups' retail chain, which includes Big Bazaar, EasyDay, FBB, and CENTRAL, has over 1800 outlets across India. This became a crucial element in bringing Reliance and Future Group together.

  • Not to the surprise of many, in August '20, Reliance Retail announced that it will acquire the consumer retail business of the Future Group. And thus, the whole saga began.

  • When Amazon acquired a stake in Future Coupons, the two sides agreed that Future Group could not enter into any deal with particular entities that displayed Reliance’s name in prominent characters.

  • Amazon cited this clause in its attempt to halt the asset-sale deal between India's two largest retailers, Reliance Retail and Future Retail.

What's Next?

  • After the deal got suspended, Future Retail shares soared ~20% to hit the upper circuit of ₹57.50 this Monday. Besides, Future Enterprises' stock jumped 20% to hit its upper price range of ₹11.61. Future Consumer and Future Enterprises rose, reaching circuit highs of ₹8.19 and ₹14.35, respectively.

  • Amazon has appealed in the Supreme Court to halt the antitrust review of the 2019 transaction.

Now, the CCI's decision comes as a setback to Amazon, which has been trying for months to halt the ₹25k cr Future Retail-Reliance deal. According to experts, the verdict might have far-reaching implications for Amazon's legal disputes with Future Group.


  • Moneycontrol

  • NDTV

  • YouTube - Yadnya Investment Academy

  • Inc42

  • Reuters

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