Jio deal to only involve 'limited' data sharing for ecomm transactions, Facebook tells CCI

New Delhi: Facebook assured the Competition Commission of India (CCI) that its investment in Jio Platforms will only involve exchange of “limited data” related to facilitating ecommerce transactions, according to the regulator’s order made public on Tuesday. CCI, however, warned both sides that anti-competitive conduct resulting from data sharing in the future could be taken up by the regulator.

CCI had approved the acquisition of a 9.99% stake in Reliance Industries Ltd-owned Jio Platforms by Facebook entity Jaadhu for ₹43,574 crore in June. The Facebook unit told CCI that neither company will acquire each other’s data, according to the order, dated June 24.

As per their commercial arrangement, Facebook-owned WhatsApp and JioMart, owned by Reliance Retail Ventures and operated by Jio Platforms, will send and receive “limited data”.

‘Data Sharing Not Purpose of Deal’

That’s solely for the purpose of facilitating ecommerce transactions on JioMart, the Facebook unit said. “Data sharing” was not the purpose of the acquisition, the order cited it as saying.

“Its use is limited, proportionate and solely for the purpose of implementing the Proposed Commercial Arrangement,” the Facebook unit said, adding that the Master Services Agreement explicitly prohibited the partners from using confidential information received from the other side for their own business purposes or disclosing it to third parties.

“This data is neither exclusionary, inimitable nor rare and substitutes exist,” Jaadhu told CCI, adding that it will be “processed in accordance with applicable law and parties’ data policies”.

Facebook didn’t respond to queries sent Tuesday evening.

The commission observed that Jio Platforms unit Reliance Jio Infocomm was a prominent telecommunications company with more than one-third of the country’s mobile users on its network. It noted that the Facebook group is ranked second in online advertising and leads in online display advertisement services. User data possessed by entities involved are complementary to each other, given the symbiotic interface between the telecommunications business and over-the-top (OTT) content and application users, CCI observed.

“Thus, any anti-competitive conduct resulting from any data sharing in the future could be taken up by the commission under Sections 3 and/or 4 of the Act having due regard to the dynamics of the concerned markets and position of the parties therein,” said the order

While Section 3 of the Competition Act deals with the regulation of combinations, Section 4 prohibits abuse of a dominant position.

CCI said the transaction may not result in unrestricted access to each other’s resources, including user data. “Nevertheless, the parties may have incentives to engage in mutually beneficial data sharing. In this regard, Jaadhu has submitted that ‘there is no data to be shared as part of the proposed transaction’,” it said.

The CCI said it’s of the opinion that the proposed combination is not likely to have any appreciably adverse effect on competition in India. “Therefore, the commission approves the proposed combination under Section 31(1) of the Act,” it said.

Facebook led investments in Jio Platforms over a three-month period that saw Reliance raise a total of over ₹1.52 lakh crore from Google, General Atlantic and Silver Lake, among others. RIL said in early July that it had received ₹43,574 crore from the Facebook unit for the 9.99% stake.

Jio deal to only involve 'limited' data sharing for ecomm transactions, Facebook tells CCI Jio deal to only involve 'limited' data sharing for ecomm transactions, Facebook tells CCI Reviewed by TechCO on 10/11/2020 Rating: 5

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