According to news reports, Facebook has floated a new entity, Jaadhu Holdings LLC, to acquire the 9.99% stake in Reliance Jio Platforms. Jaadhu is an indirect wholly-owned subsidiary of Facebook and was incorporated in March 2020. Although the company has not yet engaged in any business in India or abroad.
Facebook and Reliance had made this submission to antitrust watchdog Competition Commission of India (CCI). The CCI submission has also highlighted that Jio Platforms, Facebook-owned instant messaging app WhatsApp and Reliance Retail will also enter into a separate commercial agreement.
The deal gives Facebook 9.99% non-controlling shares in Jio Platforms. Several government officials believe that the Jio-Facebook deal needs to be scrutinised from a data point of view, and not just market share or the transaction amount. However, Ajit Mohan, Vice President and MD, Facebook India highlighted that data sharing wasn’t part of the deal. There is no data sharing in this deal.
Reliance Industries Limited (RIL) Strategy Head Anshuman Thakur also stated that the deal wasn’t exclusive and the CCI should not have any troubles approving it. Nonetheless, the company has assured that it will follow the government’s orders respectfully.
Even in the latest CCI filing, the companies have affirmed that the deal will not alter the competitive landscape, as both will continue to operate independently. Moreover, they added that there is no significant overlap between the segments that Jio and Facebook operate in.
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