Google has applied for approval from the Competition Commission of India for its Rs 33,737 crore (US$4.5 billion) investment into Jio Platforms. This is according to an undated filing made available on the commission’s website first reported by the Economic Times. The “Summary of the Transaction” filed by Google said that the only “relevant market” for the CCI to consider was “the market for the supply of mobile phones in India” (emphasis theirs). Google would own 7.73% equity stake in Jio Platforms after the transaction. The company is executing the purchase through its Delaware subsidiary, Google International LLC.

This investment reportedly needs CCI approval since both Jio and Google hold a large amount of customer data by undertaking similar business activities in the telecom and mobility space. Additionally, revenue thresholds for such transactions established in 2011 by the CCI are comfortably met by both Jio and Google.

Why Google-driven phone sales matter to Jio

The filing pointed out that Google’s agreement with Jio to help make inexpensive smartphones powered by Android was also subject to the CCI’s approval. Anti-trust approval for the deal is essential since both companies have access to large troves of customer data by the virtue of being the dominant players in their respective segments. According to ET, Google’s Android operating system runs on nine out of ten smartphones sold in India and Jio is India’s largest telecom provider with nearly 400 million users. Once cleared, Jio will have the regulatory as well as financial clearance to aggressively pursue the low-end smartphone market. While JioPhone doesn’t have a double-digit share in the feature phone market, it was once the top-selling handset, and has sold tens of millions of units.

For Jio, feature phones are a market limitation — the company’s networks do not support 2G handsets. This is why it commissioned the JioPhone, which is priced like a feature phone but supports LTE networks. But that phone ran on KaiOS, a platform that doesn’t enjoy anywhere near the kind of developer attention and consumer success that goes to Android and iOS. Google’s assistance in making an entry-level 4G phone, therefore, is key — Reliance Industries chair and managing director Mukesh Ambani has said as much: “This partnership is determined to make India 2G-mukt”.