$5.7 billion Facebook-Reliance Jio deal going to the Competition Commission of India (CCI) for approval.
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The $5.7 billion Facebook-Reliance Jio deal needs to be scrutinized by CCI mainly from the point of view of data that the combined entity will control. CCI approval is the only regulatory clearance required.
The two companies are controlling lot of consumers 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.
India’s telecom regulator is looking at the implication of the deal for consumers as well as other telecom companies.
Analysts have sought more transparency in how Facebook & Jio will function. The government needs to look into the data-sharing agreement between these two companies and it should be made transparent to both consumers and the government.
One needs to look into intrusive advertising. Since they are using WhatsApp channels for digital commerce, it opens up transaction details of these SMEs to a foreign company. It needs to be clarified that once Face Book gets access to the millions of Jio users, how will it use the information?
Ajit Mohan, MD of Facebook India, said that there would be no data sharing in this deal.
Jio has emerged as India’s largest telecom player with over 388 million subscribers within 3 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.
CCI approves investments and mergers & acquisitions (M&A) by examining the market share of the entities involved in a transaction. Government officials will watch out for any violation of net neutrality rules once the integration with Jio and Facebook products is completed.
Telecom Regulatory Authority of India (TRAI) officials remarked that at present we don’t have any laws on OTT (over-the-top) regulation in the country and this deal will have to be analysed from a larger angle. Obviously there are concerns if Facebook products including WhatsApp tend to work better on a Jio network ? However, this possible violation of net neutrality can only be observed once the deal comes through.