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CCI looking into data sharing agreement in Google-Jio Platforms deal: Report

The Competition Commission of India (CCI) is going to ask Google whether its purchase of 7.73% stake in Jio platforms includes any data-sharing agreement, the Economic Times reported. The antitrust regulator is reportedly looking into the possibility of data sharing that can affect competition, especially in the handset industry.

The CCI has been looking closely into the business dealings of Jio Platforms, which has attracted massive investments from all over the globe, including Silver Lake, Vista, General Atlantic, Qualcomm Ventures, and tech giants Facebook and Google. Jio Platforms, which is a subsidiary of Reliance Industries Limited, owns the Jio telecommunications business, along with other OTT platforms like JioMart, JioTV, JioCinema, JioChat and JioMeet.

Unnamed sources told Economic Times that CCI is likely to ask Google to explain its data-sharing with Jio, not unlike how other antitrust regulators in the world are doing in cases of deals between “big player[s]”.

Implications on phone manufacturing in India

A source told Economic Times that CCI would study how Google’s investment in Jio Platforms would affect handset development and manufacturing. CCI has reportedly reached out to various stakeholders, including device makers, to understand the possible implications of the deal.

Google’s Android OS is currently the market leader in the mobile phone market — 95% of all smartphones in India use Android. Meanwhile, Jio has the largest market share (34.33% in May) in the telecom market. The CCI is reportedly looking into whether there are any exclusive arrangements between Google and Jio, and what this might mean in terms of access to Google’s software to other players.

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The scrutiny is likely driven by Reliance chairperson Mukesh Ambani’s announcement that Jio would work with Google to build an Android-based operating system. While he wasn’t forthcoming with more details, Ambani had said that these smartphones would be available at a “fraction of the cost” of today’s budget devices. According to a September Bloomberg report, these smartphones could cost as low as ₹4,000. Reliance Industries Ltd has reportedly asked local suppliers to ramp up production capacity to make as many as 200 million of these devices over the next two years. Such prices and numbers will directly challenge extant smartphone players such as Xiaomi and Samsung.

CCI had flagged Jio-Facebook deal too

The CCI’s scrutiny is in line with its recent moves. Recently, in the case of Facebook — which has acquired a 9.99% stake in Jio Platforms for ₹43,574 crore ($5.7 billion) — CCI was wary of Facebook and Jio engaging in “mutually beneficial data sharing”. The regulator had noted that both Facebook (through its platforms Facebook, Messenger and WhatsApp), and Jio (through JioChat, JioMart, JioCinema, JioCloud, JioSaavn etc.) had access to “rich user data”. However, Facebook assured CCI that data sharing was not the purpose of its acquisition, and that it may result in only some exchange of data, only for the purpose of facilitating e-commerce transactions on JioMart.

Although the CCI okayed the deal, it still said it would watch out for anti-competitive conduct, considering the fact that both Facebook and Jio were major players in the telecom and online advertising industry, respectively, and that the user data possessed by them is complementary to each other.

Google already facing its fourth CCI probe

Google is currently facing an antitrust investigation in the country for allegedly abusing its dominance in the smart TV markets. The CCI is looking into whether Google is hurting TV manufacturers by forcing them to use its Android operating system, and prohibit them from developing modified versions of Android. This is the fourth antitrust probe faced by Google in India in the recent years.

Google had earlier been fined ₹135.86 crore for abusing its dominance of Google search. One of the more recent cases involves Google’s alleged promotion of its payments app Google Pay over competitors. The complaint was filed with CCI in February this year, which alleged that Google showcases the Google Pay app on its Play Store prominently, something that is denied to competitors. Another case involves an ongoing CCI probe into Google’s alleged abuse of its dominance in the smartphone market. Google had been accused of making it harder for phone makers to choose alternate versions of Android.

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