Facebook-Reliance Jio deal to go to CCI, Trai may also step in

As we all know on 22nd April 2020, Facebook signed a deal with Jio with a stake of 9.99% on a price of  $5.7 Billion.The two companies are “data elephants” in terms of controlling private data of Indians, and together the combined reach of Reliance Jio, Facebook and its messaging app WhatsApp would provide undue advantage against rivals, be it other technology giants like Google and Amazon or even local startups, according to the people cited above.

                                                                                                                  Credits:- Economic Times
CCI approves investments and mergers and acquisitions (M&A) by examining the market share of the entities involved in a transaction. It can however take suo motu action if it sees cartelisation or if there is a complaint that a company or grouping has higher concentration of market power.

A top government official said that the two companies would control a lot of data of consumers.
“…we need the law to scrutinise the deal from the data advantage point of view and not just money or market share,” said the official who did not want to be named. “Data is becoming a factor to reckon competitiveness and therefore the data aspects of the competition law need to be sharpened and revisited,” the person said.

                                                                                                                       Credits:- Indian Express
Anshuman Thakur, strategy head at Reliance Jio, told ET that would shortly approach the Competition Commission of India (CCI) for approval. As per company officials, CCI approval is the only regulatory clearance needed.

Jio has emerged as India’s largest telecom player with over 388 million subscribers within three years of its launch. Facebook has over 328 million users in India accessing its social network every month, while WhatsApp is present on over 400 million smartphones and is the most used messaging platform in the country.

“Access to data is an interesting aspect of this deal, these two companies are like two elephants and the combined entity may have a
n unfair data advantage,” said the government official cited above. “Once WhatsApp and Jio join (hands), they may end up killing all competition and distort fair market practices.”

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