CCI to Overlook $5.7 Billion Acquisition Deal Between Facebook and Jio

Government will inspect the merger of Facebook and Reliance Jio to avoid concentration of market power and undue advantage

Highlights
  • Facebook has Acquired 9.99% stake in Jio Platforms
  • Legal and Regulatory bodies will inspect every term of the merger to avoid concentration of power
  • Facebook has 328 Million users in India

Recently, Facebook has acquired a 9.99% stake in Reliance Jio by investing Rs 43,574 crore into Jio Platforms. The investment by Facebook is the largest foreign Direct Investment (FDI) in the technology sector of India. Since Facebook has nearly 328 Million users in India and Reliance Jio has 388 million subscribers, combined data sharing of the companies will provide an undue advantage to the companies over their rivals. To ensure that the merger is fair and no unfair advantage scenario is created, the government body CCI will carefully inspect the deal after the legal and technical aspects of the agreement are finished.

Data Agreement Should Be Made Transparent

As per analysts, the data-sharing agreement which will be finalised by the companies must be shared with the government along with customers for transparency. Since private data is one the most crucial factor in competitiveness, Apar Gupta from Internet Freedom Foundation (IFF) stated that the legal and regulatory bodies must work broadly and independently while inspecting every term of the deal to avoid the situation of concentration of market power. This news is reported by ET Telecom.

Facebook and Reliance are Competitors

Though the deal has been made between Facebook and Reliance Jio, Surprisingly both the companies have business operations which can compete with each other. For instance, Reliance Jio has JioMoney for transactions purpose. Similarly, Facebook-owned App WhatsApp has a UPI Pay feature which is awaiting government approval. Also, Facebook has a marketplace where buyers and sellers can carry out trading business, whereas Reliance Jio has already teamed up with Ajio and the talks of a merger with local kirana stores will be finalised soon.

No Data Sharing Term in Facebook-Jio Deal

Both Facebook and Reliance Jio have a massive amount of data of their combined 600 plus million users which if shared, would give an unfair advantage to the merger. However, Ajit Mohan, who is the MD of Facebook India, noted that no data sharing would be done in the deal. It is expected that the agreement between Facebook and Jio will primarily focus on setting up UPI payment mechanism in Facebook-owned app WhatsApp and especially take care of 60 million small businesses in India by opening new pathways and business opportunities.

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Shrijan loves the process of creating content in various verticals, whether it be words, sounds or videos. He's also inclined towards digital marketing and tech industry developments. The art of creation always intrigues his interest.

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