Case study | 18 October 2020

Facebook | The economics of competition clearance for Jio Platforms acquisition

View our case study on how we helped Facebook support their understanding of the economic aspects of competition clearance.

What was the challenge?

In 2020, Facebook was looking to acquire a 9.99% stake in Jio Platforms - an Indian multinational technology company. In addition to this investment, the acquisition involved a strategic tie-up whereby JioMart would use WhatsApp as one of the communication channels for its retail business. As part of the transaction process, The Competition Commission of India was required to investigate and clear the companies of many theories of harm. To support their understanding of the economic aspects of competition clearance, Facebook retained Frontier Economics (Asia-Pacific) and Frontier Economics (Europe) to support them through this process.

How did we complete the economic modelling and analysis?

The Competition Commission of India (CCI) examined many theories of harm.

In relation to horizontal concerns, the CCI examined overlaps in consumer communications apps and online advertising. In relation to vertical concerns, the CCI explored leveraging issues in the e-commerce space and electronic payment mechanisms, and analysed whether the parties would have an incentive to deviate from net neutrality.

The CCI also considered whether there would be any adverse effects resulting from data sharing between the Parties. The CCI concluded that the combination was not likely to have any appreciable adverse effect on competition in India on any of the above theories.

What were the results?

The Competition Commission of India (CCI) unconditionally cleared Facebook’s acquisition of a 9.99% stake in Jio Platforms through its subsidiary Jaadhu Holdings LLC.