According to recent reports, India's antitrust regulator CCI has accused Amazon.com Inc of concealing facts and making false submissions when it sought approval for a 2019 investment in a Future Group unit in a letter.
The note adds to Amazon's bitter legal battle with Future Group over India's firm decision to sell its retail assets to Reliance Industries, which is currently before India's Supreme Court.
Amazon has claimed that the terms of its 2019 deal to pay $192 million for a 49 percent stake in Future's gift voucher unit prevent Future Group from selling its Future Retail Ltd business to Reliance.
The Competition Commission of India (CCI) stated in a letter dated June 4, 2021 that Amazon hid factual aspects of the transaction by not disclosing its strategic interest in Future Retail when it sought approval for the 2019 deal.
"Amazon's representation and conduct before the Commission amounts to misrepresentation, making false statements, and suppression or concealment of material facts," according to the letter. It also stated that the review of the submissions was prompted by a complaint filed by Future Group.
The CCI asked Amazon in the four-page letter, dubbed a "show cause novice," why it should not take action and penalise the company for providing false information.
According to a source with direct knowledge of the matter who declined to be identified because the letter has not been made public, Amazon has yet to respond.
"We are confident that we will be able to address CCI concerns," the company stated.
Future and the CCI representatives did not respond to Reuters' requests for comment.
According to Vaibhav Choukse, a competition law specialist and partner at J. Sagar Associates, the CCI issuing a notice is unusual, and if the CCI is not satisfied with Amazon's response, it could result in a fine and even a review of the deal.
"The CCI has broad powers, including the authority to re-file the approval application and even revoke the approval in exceptionalism circumstances," Choukse explained.
According to the CCI's 2019 approval order, the decision "shall stand revoked if, at any time, the information provided" is found to be incorrect.
The dispute over Future Retail, which has over 1,500 supermarket and other outlets, is the most heated point of contention between Jeff Bezos' Amazon and Reliance, led by India's richest man Mukesh Ambani, as they compete for the country's consumers.
Amazon also faces a slew of other challenges in India, a key growth market where it has made $6.5 billion in investments, including a separate CCI investigation into alleged practises that small businesses claim have harmed them.
Furthermore, it faces the prospect of additional regulations that would restrict the sale of private labels and forbid the US firm from allowing its affiliates to list products on its website.
The CCI letter compared three sets of submissions Amazon made to it in 2019 with submissions made to other legal forums, declaring them "Contradictory."
It claimed that Amazon had explained its interest in investing in Future's coupon unit as one that would fill gaps in India's payments industry. However, according to the letter, Amazon had previously disclosed in other legal forums that the foundation of its relationship with Future Coupon was certain Special Rights it had obtained over Future Retail.
The letter stated that "Amazon has concealed its strategic interest" in Future Retail, and that "such interest and the purpose of the combination... was not disclosed to the commission despite specific requirements."
The CCI also objected to one section of a submission in which Amazon told the regulator that it had nothing to do with a specific legal agreement signed between two Future entities just days before its 2019 de. However, Amazon later claimed in front of an arbitrator that the agreement was a "integral part" of the transaction, according to the letter.