Jio Platforms and Facebook have filed an application for approval of their $5.7 billion deal with the Competition Commission of India (CCI).
Facebook has floated a new entity named Jaadhu Holdings LLC incorporated in Delaware in the United States, which will acquire 9.99 per cent stake in Jio Platforms. Jaadhu will acquire a minority, non-controlling share in Jio Platforms.
The two companies disclosed this in their submission to the CCI.
In the application, both the companies have claimed that the deal is pro-competitive, benefits consumers, Kirana stores and other small and micro local Indian businesses, and takes forward the vision of digital India.
The application follows the recent acquisition of 9.99 per cent stake in Jio Platforms by Facebook in April 2020. As a part of the deal, WhatsApp and Reliance Industries’ retail unit have also entered an agreement for commerce services.
The companies said in the filing that there is no requirement for CCI to define any relevant markets in this case and two markets under consideration are consumer communication applications and advertising services. There is no significant horizontal overlap in either of these extremely dynamic segments, characterised by low entry barriers, ease of entry and switching, and a large number of competitors, according to the application.
As per the application, Jio Platforms, WhatsApp and Reliance Retail Limited will also enter into a separate commercial agreement.
Reliance Industries and Facebook have confirmed that the proposed transaction does not alter the competitive landscape and that Facebook and Jio Platforms would continue to operate independently. Further, the companies added that there is also no significant overlap between the two business segments.