The Competition Commission of India (CCI) has suspended US retail giant Amazon’s 2019 deal with Kishore Biyani’s Future Retail (FRL) for its deliberate design to suppress information about the scope and purpose of the deal.

The competition watchdog has also imposed a penalty of Rs 200 crore on Amazon to be paid within 60 days. It said Amazon made false and incorrect statements, while seeking approvals.

The commission said in its order that Amazon ought to have notified the combination for the commercial agreements with Future Group, for the purpose of establishing strategic alignment and partnership between Amazon Group and FRL, as well as have a ‘foot-in-the-door’ in India's retail sector.

The decision comes as a huge setback for Amazon as it is locked in a fierce legal battle with Future Group to step the Indian retailer's $3.4-billion deal with Mukesh Ambani-led Reliance Industries.

“We are reviewing the order passed by the CCI, and will decide on the next steps in due course,” an Amazon spokesperson said.

In August 2019, Amazon acquired 49 per cent stake in Future Coupons, the promoter entity of FRL, for around Rs 1,500 crore. A year later, in August 2020, Future Group struck a $3.4-billion asset-sale deal with Reliance Industries (RIL).

Amazon had, in October this year, sent a legal notice to Future for striking the deal with RIL. It alleged that Future’s $3.4-billion asset sale deal with RIL breached an agreement with Amazon. It cited its non-compete agreement with the Kishore Biyani-led chain. The deal specified any disputes would be arbitrated under the Singapore International Arbitration Centre (SIAC) rules. The same month, Amazon got a favourable ruling for its plea in SIAC against the deal.

In November 2020, Future moved the Delhi High Court (HC) against Amazon, alleging interference by the US firm in the deal with RIL.

Also read:  Amazon may expand its grocery delivery business: Report