Jio-Facebook deal: Competition in jeopardy?

On 23 April, the Indian market saw one of its biggest deals go off. Facebook bought a 9.9% stake in Jio Platforms for a whopping US$5.7 billion. With Jio attracting the largest FDI deal in the Indian tech industry with its stake stale to Facebook, the deal has many wondering about the future of Indian tech start-ups, and how it will impact the digital economy. But before that, it will need to get past the Competition Commission of India’s (CCI) regulatory approval process.

Both Facebook and Jio are giants in their respective sectors. The amalgamation of both is set to create a large market share for themselves. Facebook holds more than 328 million users in India, while Jio has 388 million active users. This gives them access to more than 600 million users to target a product. If this continues, it can lead to destruction of a healthy competition. The combined data sharing will provide them an undue advantage over their rivals. To ensure that the merger is fair, and no unfair advantage scenario is created, the CCI will carefully inspect the deal after the legal and technical aspects of the agreement are finished.