Amazon sends legal notice to Future Group over Reliance deal

Amazon.com Inc said on Wednesday it has sent a legal notice to a promoter of Future Group, alleging the Indian retailer breached the terms of its contract by signing a deal with Mukesh Ambani`s Reliance Industries. The online retail giant last year acquired a 49% stake in Future Coupons Ltd, the promoter entity which owns a 7.3% interest in Future Retail , the operator of more than 1,500 stores in India including grocery chain Big Bazaar.

Amazon`s investment in Future Group came with contractual rights that include a right of first refusal and a non-compete-like pact, a source told ET Now, which first reported the news.

The e-commerce firm, in its legal notice, cited a contract arrangement that included "a restricted list" of companies Future was not supposed to enter deals with, ET Now said.

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An Amazon spokesperson confirmed the company had started the proceedings.

Amazon, Reliance and Walmart Inc`s Flipkart are in a battle to gain market share in India, where millions of middle class customers are newly adopting online purchases of food and groceries due to the COVID-19 pandemic.

Reliance said in August it would acquire the retail and wholesale business as well as the logistics and warehousing business of Future in a deal valued at $3.38 billion.

The oil-to-telecoms group, whose retail operation already runs close to 12,000 stores, is expanding its so-called new commerce venture, which ties neighborhood stores to Reliance for online deliveries of groceries, apparel and electronics in a space currently dominated by Flipkart and Amazon`s Indian arm.

Future Group was not immediately available for comment. Reliance declined to comment.