Introduction
The Supreme Court has, in a major decision,1 set aside a penalty of more than INR 2 billion which was imposed by the Competition Commission of India (“CCI”) upon Amazon.com NV Investment Holdings LLC (“Amazon”) by way of its order dated December 17, 20212 (the “CCI Order”) under Sections 43A (penalties for gun-jumping), 44 (penalties for false statements and material non-disclosure), and 45 (penalties for furnishing of false documents or suppressing/ altering material information) of the Competition Act, 2002, as amended (“Competition Act”).3
Key TakeawayS
In its judgment, the Supreme Court:
- emphasized that the CCI’s assessment of whether adequate disclosures have been made to it must be based on the substance, and not just form, of such disclosures.
- clarified that the characterisation of arrangements in a manner that the CCI disagrees with will not result in a finding of misrepresentation or omission, provided that the CCI has been provided complete information regarding such arrangements and is enabled to assess them fully.
- opined that the regulator must act strictly within the scope of the statute, and cannot pass directions it is not empowered to do (such as keeping approval orders ‘in abeyance’, or re-opening combinations after the expiry of one year from them being brought into effect), even if the regulator views these as ‘desirable.’
- held that where the CCI did not properly put a party on notice for potential consequences from proceedings, the principles of natural justice would be violated.
- stated that certainty and predictability are key features of a robust economic system, which are important for all players, and particularly for foreign investors. The CCI must ensure fair regulatory conduct so as to preserve market confidence.
The Supreme Court’s judgment is analyzed in further detail below.
Background
In 2019, Amazon filed a notice (the “Notice”) with the CCI for a three-step transaction involving Amazon and certain entities belonging to the Future group: (i) the issue of equity shares of Future Coupons Private Limited (“FCPL”) to its parent, Future Coupons Resources Private Limited (“FCRP”); (ii) the transfer of 2.52% equity shares of Future Retail Limited’s (“FRL”) held by FCRP to FCPL; and (iii) Amazon’s acquisition of 49% of the shares of FCPL by way of a preferential allotment (“Proposed Transaction”). FRL was the Future group’s flagship listed company engaged in the retail sector in India, while FCPL was engaged in the coupons business.
The Notice:
- disclosed that FCPL held equity warrants in FRL (convertible to 7.3% of shares in FRL), which had previously been approved by the CCI (this was disclosed in a footnote);
- referred to Amazon acquiring limited investor protection rights relating to FRL, requiring FCPL to obtain Amazon’s prior written consent before deciding on any matter under the FRL Shareholders’ Agreement (the “FRL SHA”) where FCPL’s consent was required;
- disclosed that there were certain existing and contemplated commercial arrangements (the Business Commercial Agreements, “BCAs”) between certain Amazon and Future group entities including relating to (i) the listing and sale of FRL’s products on the Amazon marketplace, (ii) supply of certain products by Future Consumer Limited to Amazon, and (iii) allowing consumers making purchases from FRL (and its controlled entities) to use Amazon Pay for making payments. The BCAs were stated to not be ‘inter-connected’ with the Proposed Transaction; and
- annexed copies of the FRL SHA, as well as the BCAs.
In the course of the approval process, the CCI issued several requests for information (“RFIs”) and received responses from the parties, including with respect to arrangements relating to FRL, as well as the competitive assessment of horizontal overlaps between Amazon and FRL’s retail businesses in India. The final order of the CCI approving the Proposed Transaction (dated November 28, 2019) (the “Approval Order”) also specifically referred to overlaps between Amazon and FRL.
On June 4, 2021, the CCI issued a show cause notice (“SCN”) to Amazon initiating proceedings under the Competition Act, including in respect of disclosures in the Notice, and the approval. This was based on an application moved by FCPL in the midst of arbitration proceedings between the Future group and Amazon.
Thereafter, by way of the CCI Order dated December 17, 2021, the CCI held that:
- based on documentary evidence including internal correspondence between FCPL and Amazon, the disclosures made by Amazon did not place the CCI in a position to evaluate the combination in its real scope and intended operation. The internal correspondence referred to Amazon’s inability to invest in FRL due to restrictions under the Foreign Direct Investment rules of the Government of India, and referred to a ‘twin entity’ approach to get ‘a foot in the door’ in the retail sector in India by way of the Proposed Transaction (among other matters);
- the BCAs could not be treated as separate from the Proposed Transaction as they were part of the broader commercial structure agreed between the parties; and
- Amazon had failed to notify the combination as required under the Competition Act, and had made false statements and/or omitted material particulars in its disclosure.
The CCI Order kept the original approval for the Proposed Transaction ‘in abeyance’, directed Amazon to apply for approval afresh, and imposed a penalty of INR 2.02 billion on Amazon.4
Key Points in the Supreme Court’s judgement
Issue I: Whether Amazon’s Notice adequately disclosed all inter-connected steps of the composite transaction
In this regard, the Supreme Court held that the determination of the adequacy of Amazon’s disclosures must take into account the regulatory record before the CCI, which comprised: the Notice, the documents annexed to the Notice, the information provided in response to the CCI’s RFIs, and the Approval Order itself.
Upon examination of the above, the Supreme Court found that the FRL SHA and the BCAs were referred to in the Notice, and copies of such agreements were annexed. Further, the rights and rationale relating to such arrangements were addressed in the Notice and subsequent responses. The Supreme Court also noted that competition effects of FRL-related aspects of the transaction were in fact analyzed in detail in the CCI’s Approval Order. Accordingly, the Supreme Court held that the Notice filed before the CCI disclosed all steps and agreements that explained the substance of the composite arrangement.
The Supreme Court also observed that where a notice read with contemporaneous clarifications renders ‘inter-connection’ intelligible and operationally capable of assessment, the requirement of filing a single notice for all inter-connected steps “cannot be treated as failed merely because the notifying party did not itself adopt the regulator’s later characterisation of every disclosed arrangement” – this relates to the CCI’s arguments that the BCAs, though disclosed, were stated to not be ‘inter-connected’ with the Proposed Transaction, and that the FRL SHA and the BCAs were not stated to be ‘transaction documents’ in the Notice.
Issue II: Whether the manner of disclosure of the FRL SHA and other commercial arrangements by Amazon in its notice amounted to a failure to notify the complete combination under Section 43A
The Supreme Court held that Section 43A of the Competition Act dealt with situations where a combination is not notified to the CCI, and cannot be expanded to a general provision to be invoked for every deficiency in a notice. It disagreed with the CCI’s decision to equate differing characterisation of aspects of a transaction with non-notification. It held that it would not be proper to hold that there was failure to give notice merely because the CCI later concluded “that the appellant’s narrative understated or legally distanced certain FRL-facing arrangements.”
Issue III: Whether the CCI’s findings of suppression and misrepresentation satisfied the ingredients of Sections 44 and 45
The Supreme Court observed that the CCI had applied the penal provisions of Sections 44 and 45 of the Competition Act to Amazon without demonstrating the applicability of each section to the alleged misstatements or omissions. The internal correspondence referred to in Section II above was found to be dated (except one email), and while ‘relevant,’ it was not sufficient to conclude that there was misrepresentation, given that the BCAs had been referred to in the Notice and the FRL SHA had been provided to the CCI.
The Supreme Court held that, given that the CCI was in possession of the executed agreements (as submitted by Amazon) and undertook review on that basis, it was not permissible to treat the filing as vitiated by misrepresentation unless there were clear misstatements, omission or concealment of facts. The Supreme Court further held that in penal proceedings, it is not sufficient to state that certain internal documents existed and were not filed – the CCI must show that the filing framework required their furnishing, and that the omission affected the CCI’s ability to perform its statutory review.
Issue IV: Whether the one-year limitation in the proviso to Section 20(1) constrained the CCI’s authority to initiate and conclude the 43A proceedings
The Supreme Court held that the one-year limitation period in the proviso to Section 20(1) of the Competition Act5 constrains the CCI’s authority to inquire into combinations after the stipulated period and operates as a jurisdictional limit. The directions issued by the CCI, i.e., keeping the approval ‘in abeyance’ and compelling Amazon to file a fresh Form II notice, in substance re-opened the combination for scrutiny outside the statutory limitation period in violation of the Competition Act.
Issue V: Whether the CCI possessed the power to keep an approval in abeyance and direct a fresh filing under Section 45(2) of the Competition Act
The Supreme Court held that the Competition Act does not contemplate keeping an “approval in abeyance” after such approval has been granted, and the CCI did not possess the statutory authority to pass such an order. It rejected the arguments of the CCI that (i) the power to grant an approval includes the power to revoke such approval, and (ii) Section 45(2) of the Competition Act, which empowers the CCI to “pass such other order as it deems fit,” includes a residuary power to keep an approval in abeyance.
Issue VI: Whether the proceedings were vitiated for breach of principles of natural justice, and whether the CCI, in its final order, exceeded the scope of the SCN without affording Amazon a fair opportunity to make its case against the new findings
The Supreme Court held that the SCN which initiated proceedings against Amazon under Section 43A merely disclosed the broad theme of non-notification of the FRL SHA, while the final order included decisive conclusions based on internal documents that were far beyond the scope of the original SCN. Further, the Supreme Court held that the SCN did not put Amazon on notice regarding the fact that the CCI proposed to keep the approval order ‘in abeyance’ or that it proposed to require Amazon to file a fresh application for approval. The Supreme Court held that based on the above, the proceedings “required greater procedural clarity” than what was provided, and did not afford Amazon a supplemental opportunity to address aspects for which it was not fairly put on notice. Accordingly, the Supreme Court held that the proceedings were in any event vitiated for breach of principles of natural justice.
1 Judgment dated May 27, 2026 in Civil Appeal No. 4974 of 2022.
2 See CCI’s order dated December 17, 2021, available here.
3 The CCI’s Order was substantially upheld by the National Company Law Appellate Tribunal’s (“NCLAT”) judgment dated June 13, 2022 in Competition Appeal (AT) Numbers 01, 02 and 03 of 2022.
4 On appeal, the NCLAT upheld the penalty of INR 2 billion imposed under Section 43A of the Competition Act, but reduced the penalties imposed under Sections 44 and 45 from INR 10 million each (the statutory maximum) to INR 5 million each.
5 Section 20(1) of the Competition Act states -“(1) The Commission may, upon its own knowledge or information relating to acquisition referred to in clause (a) of section 5 or acquiring of control referred to in clause (b) of section 5 or merger or amalgamation referred to in clause (c) of section 5 or acquisition of any control, shares, voting right or assets of an enterprise, merger or amalgamation referred to in clause (d) of that section, inquire into whether such a combination has caused or is likely to cause an appreciable adverse effect on competition in India:
Provided that the Commission shall not initiate any inquiry under this subsection after the expiry of one year from the date on which such combination has taken effect
This insight has been authored by Simran Dhir (Head of Competition Law Practice), Prerana De (Principal Associate) and Sehaj Mahajan (Associate). They can be reached on sdhir@snrlaw.in, preranade@snrlaw.in and smahajan@snrlaw.in, respectively, for any questions. This insight is intended only as a general discussion of issues and is not intended for any solicitation of work. It should not be regarded as legal advice and no legal or business decision should be based on its content.
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