Amazon sues Future Group over Reliance deal

By Rahul Vaimal, Associate Editor
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Online retail giant Amazon has reportedly served a legal notice to Future Group alleging that the Indian retailer infringed the terms of their agreement by signing a deal with one of the biggest conglomerate in the country, Reliance Industries.

The Amazon last year obtained a 49 percent stake in Future Coupons, which owns a 7.3 percent stake in Future Retail, a vertical which operates more than 1,500 stores in India, including grocery chain Big Bazaar.

According to the sources, the investment of Amazon in the Future group was issued with contractual rights which include the First Right of Refusal and a non-compete-like arrangement.

In its legal notice, the eCommerce firm cited a contract agreement that included “a restricted list” of companies with which Future was not expected to enter into deals, as per the reports.

The firm had started the proceedings, according to the statement of an Amazon spokesman.

Future Group as well as Reliance were not available for comment about the situation.

Satish Meena, senior forecast analyst at Forrester Research commented, “Amazon will try to explore all options to stop or delay the Reliance-Future deal but Reliance has all the muscle power and it won’t be an easy battle for Amazon to win at the court”.

The major online retail companies like Amazon, Reliance and Walmart’s Flipkart are struggling to capture market share because the pandemic had changed the purchasing habit of millions of people into online shopping, even for food and groceries.

In August, Reliance said that in a deal worth $3.38 billion, it will buy the retail and wholesale business as well as Future’s logistics and warehousing business.