The Supreme Court has set aside a Competition Commission of India (CCI) order revoking Amazon’s buy-in of 49% stake in Future Coupons in a 2019 combination. The court also rescinded a ₹202-crore penalty imposed by the competition regulator on Amazon.

A Bench of Justices Vikram Nath and Sandeep Mehta, in a judgment, held that enforcement by the regulator must protect competition without undermining market confidence.

It said the regulator’s interventions to promote market competition must not be compromised by unpredictability or form-driven approaches that did not serve the statutory purpose of the Competition Act, 2002.

The top court said fair treatment of foreign investors did not mean special treatment. “It means equal treatment under the same law, administered through the same procedural safeguards and disciplined reasoning,” Justice Nath, who authored the May 27 judgment, said.

Amazon’s 2019 investment of ₹1,431 crore in Future Coupons, which would have given it indirect sway over Future Retail, soured when the Future Group tried to sell its retail assets to Reliance Retail in 2020. Amazon had challenged the move, only to have the CCI suspend its initial approval of the 2019 deal while fining Amazon ₹202 crore on the grounds of “suppression, omission, and misrepresentation” of its perceived larger interests in Future Retail.

The court concluded that the CCI acted outside its statutory authority by withdrawing the approval given to the Amazon-Future Coupons combination in 2019. It said that the CCI had the “contemporaneous regulatory record,” executed agreements, and related arrangements when granting approval.

“It was on that record that the CCI undertook scrutiny and granted approval under Section 31(1) of the Act. In these circumstances, a later and more formal view of how the same material ought to have been described cannot convert an approved filing into a case of non-notification or suppression in substance,” the apex court said.

The court said the Competition Act, a “forward-looking instrument of economic regulation”, and the CCI play key roles in preserving and regulating competitive markets in India.

The court said the 2002 Act “promotes as well as protects”.

“The Act is enacted, keeping in view the economic development of the country, to prevent practices having adverse effect on competition, to promote and sustain competition, to protect the interests of consumers, and to ensure freedom of trade carried on by other participants in markets in India,” the court said.

Justice Nath said the CCI must not work the 2002 Act as a purely punitive law. The statute was equally intended to sustain competitive market structures through a stable and credible regulatory framework.

The court explained that the CCI had a dual objective. Investors should not view it as a competition regulator that focuses only on punitive outcomes while undermining the “promote and sustain” dimension of the statute. Conversely, the regulator should not also be seen as unwilling to enforce the law against conduct that genuinely harmed competition and compromised consumer welfare and market integrity.

“The regulator must act within the four corners of the statute. Regulatory expertise does not enlarge jurisdiction. The CCI’s authority, whether to initiate proceedings, impose penalties, or issue consequential directions, must be traceable to the Act and the Combination Regulations,” the apex court underscored.

The court pointed out that certainty in the regulatory and legal regime was vital to attract foreign investors.

“A fair and rule-bound regulatory environment serves the national interest. It protects domestic markets from anticompetitive harm, protects consumers, and assures investors, foreign and domestic, that outcomes will turn on law and evidence rather than on ad-hoc approaches,” the Supreme Court said.