(Image source from: businesstoday.in)
While the $5.7 billion Facebook and Reliance Jio merger has brought along a lot of boost to the Indian economy, it is likely that this deal will have to be checked by the CCI and TRAI might step in as well.
The main reason behind the same is likely going to be to control and check everything from the security point of view with top government officials and industry experts around.
Since these two companies are data elephants in terms of access to the data of the Indian citizens and controlling the private data of these individuals as well, it is likely that these companies have an upper hand when it comes to the security and privacy of the people of the country. This merger also gives them an upper hand against some of the other tech giants including Google, and even Amazon and the local start-ups in the country.
The Strategy Head at Reliance Digital, Anshuman Thakur has reported that they are going to approach the Competition Commission of India for their approval. That is the only approval left that the deal needs at this point.
According to the reports shared by one of the top government official, the combination of these two tech giants puts the control of a lot of data of the citizens in their hands.
They further reported saying that it is extremely important to scrutinise the deal from the data advantage point of view and not just the market share. It is necessary to keep track of the same as it has been one of the primary contributing factors when it comes to the competition law in the country.
The analysts have sought for more transparency from both Facebook and Jio at this point in terms of how they use and manage the data that they have acquired.
Neil Shah, vice president at Counterpoint Research mentioned saying that the government needs to look into the data-sharing agreement between these two parties and the same should also be made more transparent to the consumers and the government in general.
Not just that, they have also asked to cross the prospects of intrusive advertising. They also reported that since the use of Whatsapp channels have been for the digital commerce, it does make some of the transaction details of the SME vulnerable to some of the foreign countries.
It needs to be clarified that once Facebook gains authority over millions of Jio users, how are they going to use that information.
In other news, reports have it that the telecom regulator of India is also further analysing the implication of the deal and how the same will affect the consumers as well as the other telecom companies.
Jio has emerged as one of the biggest telecom services in India with over 388 million subscribers just within three years of its launch. Facebook, on the other hand, has around 328 million users in India which access their social media platform every month. Whatsapp has over 400 million users on their smartphones.
Aji Mohan, who is the MD of Facebook India, has clarified that there is going to be no data sharing in this deal.
CCI is responsible for approving the deals and mergers by examining the market share of the prospects involved in the entire investment. They also have the authority to take Suo Moto action if it witnesses any form of cartelisation or complaints that a company or grouping has higher concentration in its market power.
On a much more interesting side, it has been noted that both Facebook and Jio have businesses that are likely going to compete against one another – Jio Money and Whatsapp Pay. There are overlaps on some of the ecommerce front as well.
Aside from the close scrutiny of the deal, the government is also going to be looking into any possible violation of the net neutrality rule once the integration of the two tech giants is finalised.
The government officials have reported that the deal will have to be analysed on a larger scale. There are several concerns that they are going to further take a look into and ensure that this merger helps bolster the Indian economy without costing people’s privacy and security.
By Somapika Dutta
