The Supreme Court has ruled in favour of Amazon in its long-running dispute with the Competition Commission of India (CCI), holding that the regulator lacks the statutory power to revoke, suspend, or keep an approved combination “in abeyance” on allegations of non-disclosure. The court set aside the CCI’s Rs 202 crore penalty order as well as the judgement of the National Company Law Appellate Tribunal that had upheld the regulator’s action.

The judgement was delivered by a bench led by Justice Vikram Nath in an appeal arising from Amazon’s 2019 acquisition of a 49% stake in Future Coupons Private Limited (FCPL). At the time of seeking approval, Amazon had notified the transaction to the CCI as a combination under Section 6(2) of the Competition Act, 2002, disclosing its investment structure, commercial rationale and investor protection rights linked to Future Retail Limited (FRL). The CCI granted approval to the transaction in November 2019.

The dispute surfaced after commercial differences emerged between Amazon and the Future Group over a proposed asset sale to Reliance Retail. FCPL subsequently approached the CCI, alleging that Amazon had concealed its true objective of obtaining strategic influence over FRL and had misrepresented the nature of the transaction while seeking regulatory approval.

In December 2021, the CCI concluded that Amazon had made material omissions and incorrect disclosures and imposed a penalty of Rs 202 crore under Sections 44 and 45 of the Competition Act. The regulator also took the additional step of keeping its earlier combination approval in abeyance pending fresh examination. The NCLAT later affirmed the CCI’s decision, prompting Amazon to approach the Supreme Court.

The Supreme Court held that while the Competition Act empowers the CCI to impose penalties for omissions or incorrect statements, it does not confer any authority to revoke, cancel, suspend, or retrospectively undo an approval already granted to a combination.

The Court observed that the CCI is a statutory body and can exercise only those powers expressly provided by legislation. Since the Competition Act contains no provision authorising the regulator to place an approved transaction in abeyance, the impugned action was held to be without jurisdiction and legally unsustainable.

The Bench further clarified that internal business assessments, commercial strategies, or forward-looking alignment documents cannot override the formal disclosures made in a combination notice, particularly where the transaction structure and relevant agreements were placed before the regulator.

The Court found that Amazon had disclosed the transaction as a composite arrangement and had furnished the material agreements relevant to the investment. It held that subsequent reliance on internal commercial documents could not be used to retrospectively transform a disclosed investment transaction into a case of fraud or suppression.

Thus, the Supreme Court quashed the CCI’s penalty order and restored the original combination approval. The Court also directed that any amount recovered or deposited by Amazon towards the penalty be refunded within eight weeks, carrying interest at 6% per annum, which would increase to 9% per annum in case of default.

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