Faculty of law blogs / UNIVERSITY OF OXFORD

Amazon’s Antitrust Paradox Goes to India!


Rahul Singh
Associate professor of Law at the National Law School of India University, Bangladore
Madhavi Singh
Research Associate, National University of Singapore


Time to read

4 Minutes

In an unprecedented order, the Competition Commission of India (‘CCI’) suspended its approval of Amazon’s acquisition of Future Coupons’ promoter entity. This is the first time that the CCI has suspended a prior merger approval. Additionally, it imposed a fine of INR 202 crores on Amazon for making false statements. The National Company Law Appellate Tribunal (‘NCLAT’) recently upheld the CCI’s order. This post highlights the legal deficiencies in the CCI and NCLAT orders and argues that the Supreme Court of India ought to reconsider the issues at the appeal stage.

Standard for proving misrepresentation—especially ‘material’ misrepresentation

The three contracts which formed the basis of the commercial relationship between Amazon and Future Group had already been filed before the CCI as part of the combination (ie merger) notification. Although all the relevant documents had been submitted, the CCI found that the manner in which these contracts were portrayed was misleading and that Amazon had not been forthright about the purpose of the combination and its strategic interests in Future’s retail arm; and that Amazon did not ‘expressly’ notify the shareholders agreement with respect to Future Retail and Amazon’s commercial agreements as being interconnected with the combination.

The CCI’s reasoning that in spite of disclosure of all relevant documents, a notifying party could still be found liable for making a false statement or omission is peculiar. The practice of framing the narrative and portraying contracts in the most beneficial light is considered part of legal strategy and commercial practice. It is the responsibility of the regulator to sift through the narrative and the hyperbole to identify the actual issues; to read the fine text of the contract(s) to understand its true effects. Instead in this case, the CCI shifted this onus on the notifying party(ies), stating that they should not disclose contracts ‘in a distorted and elongated manner of its convenience’. It opined that the filing of a combination notification is not akin to ‘adversarial litigation’ but is a ‘trust based regulatory system’. This reasoning turns the distinct roles of various players in the regulatory system on its head. It also creates significant uncertainty for notifying parties since in spite of full disclosure they could still be penalised if their submissions are subsequently found to be contrary to the CCI’s perception of the ‘actual scope and purpose’ of the combination. 

Additionally, several of the purported misrepresentations pertained to issues that were not factual but were the subject matter of assessment. For instance, the CCI found that Amazon had failed to disclose its ‘strategic’ interest in Future’s retail arm. However, the question of what constitutes a ‘strategic’ interest is a subjective assessment. The notifying party can only be expected to factually declare all the rights that it acquires. It is for the CCI to ascertain whether these rights amount to a ‘strategic’ interest based on its own competition law jurisprudence. Similarly, the onus is upon the CCI to undertake an independent assessment of the ‘actual scope and purpose’ of the combination based on the documents in its possession and not merely rely on the notifying parties’ framing of the narrative.    

Further, sections 44 and 45 of the Competition Act, 2002 require that the CCI must not only show that the notifying party has made a false statement or omission, but also that such misrepresentation or non-disclosure is ‘material’. A non-disclosure or misrepresentation can only be ‘material’ when it affects the CCI’s assessment of whether the combination would cause an appreciable adverse effect on competition (‘AAEC’). Neither the CCI nor the NCLAT demonstrated that the purported misrepresentations had affected the CCI’s AAEC assessment. Instead, the CCI held that the AAEC assessment would be carried out after the parties had re-filed the notification. 

Power of the CCI to suspend or revoke a combination approval order

The Competition Act, 2002 does not expressly confer on the CCI the power to re-examine or suspend or revoke its own prior combination orders. The CCI traced this power to section 45(2) which allows it to pass ‘such other order as it deems fit’ in case of offences in relation to furnishing of information. However, section 45(2) cannot be read in a vacuum to bestow on the CCI limitless powers to pass any order. Specifically, the interpretation of section 45(2) should not elide the scheme of the Act. The Competition Act, 2002 through sections 5 and 6 clearly envisages a system of mandatory ex ante combination approval, even penalising parties when they fail to notify combinations. The pivotal nature of the ex ante analysis in the context of combinations becomes even more apparent as it stands in stark contrast to the ex post competition violations. Interpreting section 45(2) to allow the CCI to analyse combinations even ex post is antithetical to the scheme of the Act.

Furthermore, neither the CCI nor the NCLAT identifies any limitation period up to which it could re-examine a prior combination approval order. For instance, section 20(1) of the Act empowers the CCI to inquire into combinations that have not been notified. Even in these ostensibly more egregious instances of non-notification, the inquiry cannot be initiated after one year of the combination taking effect. In contrast, the CCI’s self-bestowed powers of re-examination of combination orders seem to have no limitation period. In this case also the CCI suspended its combination order more than two years after issuing it. Such powers, which neither have a basis in the text or the scheme of the Act, nor have clearly defined limits, will render the mandatory ex ante combination approval system redundant. It would also make combinations in India very unpredictable as any combination could be re-examined anytime.   

Use of sections 3 or 4 for ex post offences  

Importantly, precluding the CCI from re-examining approved combinations does not mean that it couldn’t examine the same agreement or conduct using the ex post provisions under the Act. If the CCI believes that any of the agreements between Amazon and Future group has anti-competitive effects, then it could examine these under section 3 (anti-competitive agreements) or section 4 (abuse of dominance). Indeed, the use of section 3 or 4 in such a case would be more aligned with the scheme of the Act which clearly demarcates the scope of the CCI’s ex ante and ex post powers. The more accurate use of section 3 or 4 instead of section 45(2) has real implications: it would compel the CCI to prove the constituent elements of these offences instead of the current approach where the CCI and NCLAT did not even indicate if the combination gave rise to an AAEC.


While both the CCI’s and the NCLAT’s order seem substantive (the CCI wrote a rare 50+ pages order and the NCLAT penned over 300 pages!) and might create an illusion of detailed analysis, this post argues that the orders are riddled with legal errors. An appeal of the NCLAT order to the Supreme Court of India was inevitable. At the appeal stage, the Supreme Court should not fall prey to the unfulfilled promise of expertise of a specialised regulator or the illusion of a seemingly detailed order, but should exercise a full merits review.

Rahul Singh is Associate Professor of Law, National Law School of India University, Bangalore

Madhavi Singh is Research Associate at the National University of Singapore


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