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CCI reviewing Facebook-Reliance Jio deal

With this deal, both the firms are on a path to give competition to the e-commerce giants like Amazon and Walmart-backed Flipkart for a piece of the sector that KPMG believes is set to grow to $200 billion by the year 2027.

CCI reviewing Facebook-Reliance Jio deal

The chairman, however, didn't disclose a timeline for a decision on the Facebook-Jio review. (Photo: AFP)

Country’s antitrust watchdog, the Competition Commission of India (CCI), is reviewing Facebook’s purchase of 9.99 per cent stake in Reliance Industries’ digital arm, Jio Platforms, reports stated on Wednesday.

The reports quoted Chairman Ashok Kumar Gupta as saying that the watchdog is also examining if new parameters should be included in its assessment criteria as currently some mergers and acquisitions escape the threshold for scrutiny even if potential harm is evident

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Peculiarities such as “strong network effects, high returns to scale and access to a huge amount of data” may incentivise digital firms to engage in anti-competitive conduct, Gupta said, without referring to any particular case, as per reports.

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The chairman, however, didn’t disclose a timeline for a decision on the Facebook-Jio review. As per rules, if the CCI doesn’t decide on the deal within 210 days, it is deemed to be approved.

Facebook in mid-April announced an investment of $5.7 billion (Rs 43,574 crore) to buy a 10 per cent stake in the firm that houses billionaire Mukesh Ambani’s telecom arm Jio as the social media giant aimed to expand presence in its largest market in terms of subscriber base.

With this deal, both the firms are on a path to give competition to the e-commerce giants like Amazon and Walmart-backed Flipkart for a piece of the sector that KPMG believes is set to grow to $200 billion by the year 2027.

Meanwhile, Facebook, in its application to the competition commission, has argued that the deal does not alter the competitive landscape in any relevant market. Filings show Facebook and its unit WhatsApp Inc have proposed to set up a digital marketplace as part of the investment in Jio.

CCI is also probing Amazon and Walmart Inc.’s Flipkart over exclusive arrangements between the retailers and some mobile phone brands, and preferential treatment given to some sellers. Traders have been agitating against e-commerce companies who blame the industry for anti-competitive activities.

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