Supreme Court Upholds Amazon's Appeal, Sets Aside Rs 202 Crore Penalty Order

Supreme Court Sets Aside Penalty on Amazon, Suspends Deal with Future Coupons

In a significant relief to Amazon, the Supreme Court on Wednesday set aside an order that had imposed a Rs 202 crore penalty on the US e-commerce giant and suspended its deal with Future Coupons Pvt Ltd.

The Supreme Court allowed the appeal filed by Amazon.com NV Investment Holdings LLC, a direct subsidiary of Amazon.com Inc, challenging a June 13, 2022 order of the National Company Law Appellate Tribunal (NCLAT). The NCLAT had rejected Amazon's appeal against an anti-trust suspension of its investment deal with Future Group, saying the retailer had not made full disclosures at the time of seeking approval.

The bench of Justices Vikram Nath and Sandeep Mehta also set aside the Competition Commission of India's (CCI) December 17, 2021 order, which had levied the penalty on Amazon and suspended its deal with Future. The order was set aside, with the bench stating that if any amount was deposited or recovered from Amazon pursuant to these orders, the same be refunded within eight weeks.

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The Supreme Court emphasized the importance of a stable and fair regulatory framework, particularly in the current global economic climate. It noted that a predictable and rule-bound regulatory environment strengthens confidence in the legal system and fosters compliance. The bench also highlighted the importance of fair treatment of foreign investors, stating that it means equal treatment under the same law, administered through the same procedural safeguards and disciplined reasoning.

The bench further noted that the NCLAT had affirmed, in substantial part, the order passed by the CCI in proceedings initiated against Amazon.com NV Investment Holdings LLC under the provisions of the Competition Act, 2002. The tribunal had supported the CCI findings that Amazon didn't make full disclosures regarding the deal with Future Retail subsidiary -- Future Coupons Pvt Ltd (FCPL).

In 2019, Amazon.com NV Investment Holdings LLC had acquired 49 per cent shareholding in FCPL, which in turn held 9.82 per cent interest in Future Retail Ltd (FRL). Citing its indirect shareholding in FRL, Amazon had opposed the sale of its retail assets to Reliance Industries for Rs 24,713 crore. The CCI order had stated that Amazon had not disclosed its interest in FRL while seeking approval for its investment in FCPL.

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