As we had predicted here, the Indian antitrust watchdog, the Competition Commission of India, has formally okayed Facebook's $5.7 billion investment in Reliance Industries's digital subsidiary Jio Platforms.
In a terse tweet yesterday, the Competition Commission of India said it had approved Jaadhu Holdings’s proposed multi-billion-dollar investment in Jio Platforms for a 9.99% stake in Jio Platforms.
Jaadhu Holdings LLC, the wholly-owned subsidiary of Facebook, was set up in Delaware, USA specifically for this deal.
@CCI_India approves acquisition of 9.99% stake in Jio Platforms by Jaadhu Holdings LLC.June 24, 2020
- Over 1200 Kirana stores join hands with JioMart, Facebook pilot program
- Jio Mart to sell smartphones and electronics
- WhatsApp as an e-commerce platform gets unveiled
The CCI announcement comes a week afte it said it was scrutinising the deal for possible data misuse. The CCI chief had even suggested that, if need be, his office would consider amending the current rules for some mergers and acquisitions in the country.
Jaadhu Holdings, for its part, had submitted, that the deal is “pro-competitive, benefits consumers, kirana stores (neighborhood stores) and other small and micro local Indian businesses, and takes forward the vision of digital India.”
The deal may still be under the microscope as a few startups in India are planning to file a plea against it.
What's up with WhatsApp Pay?
While the CCI's clearance may indeed be good news, there is some headache for Facebook and Jio Platforms, who expect Facebook-owned WhatsApp to be the centre point to the deal.
WhatsApp's 400 million user base in India is what Facebook and Jio Platforms are banking on as they seek to make a major foray into e-commerce (especially e-tailing of groceries and every-day items).
Facebook said it planned to work with Reliance Jio Platforms to empower 60 million small businesses, including mom-and-pop stores in India. Soon enough, 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.
It is here the delay in the roll out of WhatsApp Pay must cause concern. The beta stage has been crossed, but the final unveiling is geting stalled for whatever reason.
WhatsApp Pay, in beta mode, was made available to several users in the country in 2018. Google Pay which was rolled out in the country around the same time, and Walmart’s PhonePe, have established clear dominance in India’s mobile payments market.
Will trouble in Brazil have echo in India?
Not encouragingly, WhatsApp Pay which was rolled out in Brazil a few days back (After India, Brazil is the app’s second-biggest market with more than 120 million users), its Central Bank suspended the payment feature in the country.
According to Brazil’s central bank, the WhatsApp feature poses a threat to the country’s existing payments system in the context of competition, efficiency and data privacy - and should be subject to a review by the nation’s monetary watchdog.
The words to note in the Indian context here are “competition” and “data privacy”.
World over, WhatsApp users spent 15 billion minutes on voice calls a month. That might of WhatsApp in India is scary. That’s why even before WhatsApp could launch payments in India, the National Payments Commission of India (NPCI), the body that runs the retail payments system, wanted to put a 33% market share cap on payments apps. There has been no decision on this yet.
So the last word on the deal may not have been spoken yet.