Amazon’s bid for stake in Future Retail faces antitrust

Amazon in August agreed to acquire a 49% stake in a unit of India’s Future Group which owns 7.3% of Future Retail, giving the US-based company a 3.58% stake in the retailer which operates more than 1,500 stores in the country. The deal would help Amazon tap into the booming retail market in India, as it separately boosts its e-commerce operations, offering everything from electronics to groceries on its Indian website. Future Retail runs 290 budget department and grocery stores branded “Big Bazaar.”

In a notice to Amazon last month, the Competition Commission of India (CCI) said “in certain overlapping segments and areas of operation of the parties, the combined market share exceeds the threshold specified in the combination regulations”, one of the sources told Reuters. The CCI also queried the procedure Amazon adopted to seek approval. Amazon had notified the CCI through a so-called Form I, instead of a Form II that is more onerous and is required when parties assess the combined entity will exceed a pre-defined market share threshold.

The CCI sought justification from Amazon on why it chose to file a Form I, the source added, which could potentially delay approval of the deal. A Form I filing typically takes 2-3 months compared with three to six months for a Form II. Amazon and Future Retail declined to comment for the story. A source at Future group said it had recently answered the CCI’s questions related to the deal, but did not elaborate. Additionally, the competition watchdog has asked Amazon more than 40 questions related to the deal and its businesses, the source said.