Facebook’s $5.7 billion investment in India’s Reliance Jio Platforms that could help the American social media juggernaut make inroads into tens of millions of shops in the country is being reviewed by the local antitrust watchdog.
The Competition Commission of India (CCI) said on Wednesday that it is reviewing Facebook’s proposed multi-billion-dollar investment in Reliance Jio Platforms for a 9.9% stake in the top Indian telecom operator.
Bloomberg first reported about the antitrust review, citing CCI chairman Ashok Kumar Gupta. The Indian watchdog declined to elaborate the aspects of its examination, but told the outlet that it assesses every deal that could misuse users’ data and may consider amending the current rules for some mergers and acquisitions in the country.
In a recent filing, Facebook said the proposed transaction and commercial agreement with Reliance Jio Platforms, which has amassed over 388 million subscribers within four years, are “pro-competitive, benefits consumers, kirana stores (neighborhood stores) and other small and micro local Indian businesses, and take forward the vision of digital India.”
Analysts have said that Facebook’s proposed investment in billionaire Mukesh Ambani’s Reliance Jio Platforms, its biggest investment in recent years, could help the social media giant expand its reach in India, which is already its biggest market by user count.
Facebook’s eponymous service reaches about 350 million users in India, while its messaging service WhatsApp has amassed over 400 million users. WhatsApp is by far the most popular service in the world’s second largest market.
In late April, when the two companies announced they had agreed to a deal, Facebook said it planned to work with Reliance Jio Platforms to empower 60 million small businesses, including mom-and-pop stores in India.
Early signs of this collaboration was apparent a week later when JioMart, a joint venture between Reliance Jio Platforms and Reliance Retail (India’s largest retail chain), started to allow customers to track shipment through WhatsApp.
Some analysts said that the deal with Ambani, India’s richest man and an ally of Indian Prime Minister Narendra Modi, could also help Facebook stay on the good side of the Indian government.
In India, where Facebook’s Free Basics program was blocked in early 2016, the firm has been stuck in a regulatory maze to get clearance for a nationwide rollout of WhatsApp Pay.
Facebook launched WhatsApp Pay in beta mode to a million users in the country in 2018, only months after Google launched its payments service in India. While WhatsApp Pay remains stuck at a million users, Google and Walmart’s PhonePe have established clear dominance in India’s mobile payments market.
On Monday, Facebook launched WhatsApp Pay in Brazil, the instant messaging service’s second biggest market and said it looks forward to launching the payments service in more nations.