Reliance Jio’s $5.7 billion deal with Facebook is under CCI scanner.

India’s antitrust watchdog examines the acquisition by Facebook Inc of a 10% stake in the digital assets of Reliance Industries Ltd, which would give the US giant another footprint on one of the most rapidly growing internet markets in the world.

The Competition Commission of India seeks to prevent malpractices in all the transactions it evaluates, said Chairman Ashok Kumar Gupta in an email interview, refusing to comment more on the Facebook-Jio transaction until it has been examined. 

The regulator is also considering as to if new standards must be included in its evaluation criteria; some mergers and acquisitions are currently outside the threshold for scrutiny, even if potential harm is evident, Gupta said.

Observable traits such as “strong network effects, high scale returns and access to a large amount of data,” without reference to any particular case, Gupta stated, could encourage digital companies to conduct themselves in a non-combat manner.

The $5.7 billion investment by the U.S. social media giant in Reliance digital is the largest of a range of $13.7 billion in Mukesh Ambani-controlled investment projects in Jio Platforms Ltd. Approval will enable Asia ‘s wealthiest tycoon to stick to its debt reduction plan and to create a formidable digital home-grown force capable of supporting Amazon.com Inc in India.

Facebook claimed that the agreement would not change a competitive landscape in the specific sector in its appeal to a trade tribunal. Regulatory disclosures reveal that, in the Jio investment, Facebook and its WhatsApp Inc unit have suggested the creation of a digital market.

India is one of the fastest-growing internet arenas in the world, with 1.3 billion population. Amazon and Google compete for supremacy.

The antitrust committee examines the exclusivity between retailers and other smartphone brands via Amazon and Walmart Inc.’s Flipkart Online Services Pvt, which gives preferential consideration to certain vendors. 

In India, the e-commerce industry is strongly criticized by local traders for their anti-competitive activities like deep discounting.

A time-line for a Facebook-Jio review decision was not revealed by Gupta. According to Indian law, it is deemed approved if the commission does not act on the contract within 210 days.

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Abhay Shah is a professional Digital Marketer and a Web Designer who is having more than 7 years of experience in the marketing field. Based on its knowledge, he tries to formulate the best information and keeps himself updated with the latest trends.

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