A thread on the CCI order in the #Amazon–#Future case.
Why has CCI fined Amazon Rs 202 crore and put its approval of the deal in abeyance?
▪️ Because, on review, it found Amazon made wrong filings
▪️ Amazon "willfully" omitted to share its actual intent behind the deal.
Why has CCI fined Amazon Rs 202 crore and put its approval of the deal in abeyance?
▪️ Because, on review, it found Amazon made wrong filings
▪️ Amazon "willfully" omitted to share its actual intent behind the deal.
In my column I argue that
Amazon may have made filing errors/violations & should pay commensurate fine/refile.
But, it is tough to believe that CCI was unaware that Amazon’s deal with Future Coupons was with an eye on Future Retail.
(My column) bloombergquint.com/business/futur…
Amazon may have made filing errors/violations & should pay commensurate fine/refile.
But, it is tough to believe that CCI was unaware that Amazon’s deal with Future Coupons was with an eye on Future Retail.
(My column) bloombergquint.com/business/futur…
Rewind to 2019: Amazon buys 49% in Future Coupons (FCPL)
- FCPL was new to coupon biz
- Its key value was as promoter of Future Retail (Big Bazaar, EasyDay etc)
- Via FCPL Amazon got some rights over FRL – namely ROFR, promoter share sale restriction
bloombergquint.com/business/amazo…
- FCPL was new to coupon biz
- Its key value was as promoter of Future Retail (Big Bazaar, EasyDay etc)
- Via FCPL Amazon got some rights over FRL – namely ROFR, promoter share sale restriction
bloombergquint.com/business/amazo…
In 2019, CCI approves the Amazon – FCPL deal.
In its order CCI acknowledges FRL’s role in the deal and even includes it in the competition assessment.
Read CCI order: cci.gov.in/sites/default/…
In its order CCI acknowledges FRL’s role in the deal and even includes it in the competition assessment.
Read CCI order: cci.gov.in/sites/default/…
So what has changed now?
CCI received internal Amazon notes.
CCI says (in brief)
1. Notes show Amazon was mainly interested in FRL.
- This was not disclosed explicitly by Amazon in filings with CCI.
CCI received internal Amazon notes.
CCI says (in brief)
1. Notes show Amazon was mainly interested in FRL.
- This was not disclosed explicitly by Amazon in filings with CCI.
2. Amazon has described the rights in FRL as strategic not protective.
3. Other commercial deals between Amazon & Future Group entities in 2019 were described as independent of the deal.
- That is wrong, says CCI.
3. Other commercial deals between Amazon & Future Group entities in 2019 were described as independent of the deal.
- That is wrong, says CCI.
Fair enough. Wrong filing deserves penalty/refiling.
But nothing material has changed, is my argument.
Whether you call the rights strategic/ protective/ negative - their nature and scope hasn’t changed.
The terms of the commercial agreements haven’t changed either.
But nothing material has changed, is my argument.
Whether you call the rights strategic/ protective/ negative - their nature and scope hasn’t changed.
The terms of the commercial agreements haven’t changed either.
CCI should've/would've considered all this in 2019.
Then approved deal.
If it did, then nothing’s changed so on refiling CCI’s verdict would be same as 2019.
If it didn’t, then CCI was being naïve to believe Amazon was interested in coupons not retail.
bloombergquint.com/business/futur…
Then approved deal.
If it did, then nothing’s changed so on refiling CCI’s verdict would be same as 2019.
If it didn’t, then CCI was being naïve to believe Amazon was interested in coupons not retail.
bloombergquint.com/business/futur…
I hope this helps @SandeepBhusha10
My bad - I should've written the column in a less technical fashion.
My bad - I should've written the column in a less technical fashion.
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