With great power comes great responsibility and, well, in this case, great competition too. Though Amazon and Reliance might have seemed superficially normal, there is a lot to be unfolded. Despite gaining quite successful ventures individually, there seems to be a disgusting squid between Amazon and Reliance. The competition is so grave that there is a legal battle involved. You read it right! This also justifies the consequences which are brought by monopoly. Today, “Amazon” and “Reliance” are known in almost every household, and both have proficiently made a name for themselves in the e-commerce niche. In the duration where Amazon and Reliance existed in the limelight for a long time, they have also evolved as each other’s strongest contenders. Amazon has efficiently managed to expand its reach within distant corners of the world, and so has Jio. Jio has not kept itself restricted only to the telecommunication business but has instead improvised significantly by entering the fields of fashion and electronics. Reliance is busy aiming high, and it is also engrossed in preparing itself to tick mark its goals.
The domain of groceries seems to be embedded with intense competition because it comprises 55% of all Indian retail sales. Initially, Amazon tried to steadily make its way and enter the grocery’s aspect by taking baby steps such as Amazon Pantry and Amazon Fresh. These moves by Amazon ignited a spark within Reliance and made it rebuttal and dress as Jio’s strongest competitor. The clothing here is “JioMart.” Little do people know that JioMart spans 200 cities, and its average orders include as much as 250,000 charges per day! Within weeks of its launch, Reliance reached equal levels of Amazon, and hence the feud was begun. It is rumored that both the companies were sprawling over a humongous chain of groceries called Future Retail. The name sounds familiar. Future Retail is the one which is responsible for controlling all the Big Bazaar stores across the nation.
All was not lost as Reliance indeed tried to negotiate an acquisition, but Amazon seemed to be sticking firm with its decision of not letting the foe gain control. Soon there was an exciting twist noticed in this battle due to the attempt made by Reliance to acquire assets of a whopping amount of Rs. 24,731 crore. The tricky part here is that Reliance tried to receive assets in Future Group. Meanwhile, Future Group was a loyal partner to Amazon. It did not take long for Amazon to feel betrayed by this embankment that ruptured their already fragile relations. In response to the surpassed incidents, Amazon conferred an arbitration process at Singapore International Arbitration Centre, also known as SIAC.
Owing to the violation of the contract with Amazon, the SIAC played its hands and prohibited the merging of Future Retail and Reliance Retail in October 2020. Unsurprisingly, Amazon had its list of “restricted persons,” with Reliance being the first on it. Amazon defended itself by conveying the detailed clauses from a 2019 deal that stated that Indian groups were not allowed to sell their retail assets to anyone, especially not to anyone on the “restricted persons” list. In the aftermath of this haphazard state of affairs, Reliance, unfortunately, could not proceed with its intended plan of a 3.4 billion USD deal to buy any Future Group’s retail assets. In the following turn of almost comical events, Future and Reliance refused to abide by these rules because, poorly in India, there is an absence of any mechanism that holds the potential to enforce international arbitration’s order.
Hence, the deal reached a dead-end and kept the owners, Mukesh Ambani and Jeff Bezos’s thorns interlocked. These thorns were the embodiments of the legal battle. Not giving up yet and shooting for another chance, Amazon appealed to the High Court to bring the arbitrator’s decision into action. No wonder our judiciary system demanded the quarrel to be kept on hold. Still managing to proceed strong-headedly, Amazon did not stop there and put the case in the shells of the Supreme Court. Due to the Supreme Court’s decision, the shares of Reliance and Future Group woefully fell. We need not abandon the Future Group’s argument, which rightfully states that if the deal remains unapproved, the company would have to undergo an ulterior shutdown with the thud of the shutter, which would continue to echo for years. This, in turn, would also affect the employment of more than 29,000 people miserably. The Future Group has conveyed that it would proceed with all the possible methods which could help complete the Reliance deal and “protect the interests of its stakeholders and workforce.” This legal battle has put an image of two determined opponents, Mukesh Ambani and Jeff Bezos, who envision victory and are unwilling to put their swords down.
– Harshita Kirnalli