CCI to probe into Jio-Facebook deal over data abuse

The Competition Commission of India (CCI) will be scrutinising the Reliance Jio Platforms and Facebook deal, which kick started the recent funding spree for the digital services and telecom giant. Facebook had invested close to $5.7 Bn (INR 43,574 Cr) in Jio Platforms in exchange for a 9.99% stake in April 2020.

With this investment, Facebook had become the largest external investor in Jio Platforms, second only to parent company Mukesh Ambani-led Reliance Industries. The deal is also said to be the largest foreign direct investment (FDI) in the technology sector in India.

CCI Chairman Ashok Kumar Gupta, in an email said that the CCI is looking to prevent the misuse of data in all the deals it assesses, and has also been devising new parameters that should be included in its assessment criteria.

Gupta noted that with the current criteria, some mergers and acquisitions escape the threshold even though the potential harm is evident. He added that the network effect of such deals, high scalability and access to tonnes of data may incentivise digital companies to engage in anti-competitive conduct.

Meanwhile, CCI has also started conducting studies on the telecom sector as well as mergers and acquisitions in the digital market in order to enhance its capabilities to deal with unfair business ways. The Indian Council for Research on International Economic Relations (ICRIER) has submitted an interim report to CCI after consulting the stakeholders in the industry.

The Indian telecom industry has undergone a drastic makeover, especially after the entry of Reliance Jio, which is the biggest service of Jio Platforms. The company has over 388 mn subscribers on board. According to Bernstein Research, Reliance Jio may capture 48% of the Indian mobile subscriber market share by 2025. It is to be noted that Facebook's investment in Jio is the largest FDI deal in the technology sector in India.