File image of Reliance Industries chief Mukesh Ambani | Photo: Bloomberg
File image of Reliance Industries chief Mukesh Ambani | Photo: Simon Dawson | Bloomberg
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New Delhi: The Swadeshi Jagran Manch, an RSS affiliate, has condemned Facebook’s Rs 43,574 crore purchase of a 9.99 per cent stake in Reliance Industries’ digital arm, saying it raises many concerns about privacy and net neutrality.

The deal, it said, poses a bigger threat to local interests than US tech giant Amazon and Flipkart, which is majority-owned by the American retail major Walmart.

The concerns have been echoed by the Confederation of All India Traders (CAIT), the largest body representing retail traders, and the Laghu Udyog Bharati, another RSS affiliate.

The organisations have pointed to the fact that Facebook and Jio are both market leaders in their respective fields, with access to massive amounts of data, which they claim might set the stage for “digital colonisation”. 

Global social media giant Facebook, which also owns WhatsApp and Instagram, purchased a minority stake in Reliance Industries’ digital arm Jio Platforms as part of an all-cash deal earlier this week. The deal pairs WhatsApp with Jio Platforms, which includes the telecom venture Reliance Jio Infocomm, and is expected to fuel the growth of the Ambani e-commerce portal JioMart, through which the company aims to empower the neighbourhood grocery stores.

Reliance Jio is India’s biggest telecom service with a subscriber base of 33.13 crore users as of July last year, while Facebook and WhatsApp are by far the biggest social media players in the country, with 32.8 crore and 40 crore subscribers, respectively.


Also Read: Jio-Facebook deal: Boosts India as FDI destination or threatens to be e-commerce monopoly?


‘Deal is threat to democracy’ 

According to SJM convenor Ashwini Mahajan, the Facebook-JioMart deal will “monopolise overall digitisation”. 

“This deal is a bigger threat than Walmart and Amazon because, in the present world, those who have data are kings… Here’s Facebook, which has world’s largest data, and it is associating with Reliance Jio, which has the largest (telecom) platform in India,” he said. 

“It will not only end competition in e-commerce segment by monopolising data but will destroy DTH and OTT platform and other media platforms… In the long run, it will be big blow to net neutrality,” he added. “In the bigger picture, it will be a threat to democracy,” he said, pointing to the Cambridge Analytica scandal.

Net neutrality is seen as one of the foundational principles of the internet. The concept emphasises that the web should be available as a level playing field for all players. Reliance Jio, owned by India’s richest man Mukesh Ambani, had earlier dismissed concerns that it would extend preferential treatment to Facebook and WhatsApp

Industry insiders say the Facebook-Jio partnership is expected to help JioMart take on Amazon and Flipkart in India, with the e-commerce sector expected to balloon to $200 billion by 2028 from $30 billion in 2018. However, Mahajan said the deal could create an e-commerce monopoly and rupture the entire ecosystem.

“Look what they (Jio) have done in the telecom sector, they monopolised the sector… Other players are dying day by day, this can be replicated in the e-commerce segment,” he added. “Today, there are several players for groceries, clothes, utensils, but once such two giants enter any market, the rules of the game change.”

Once Facebook and Jio become partners, Mahajan said, “they will have monopoly on data and will block others”. “They will push their content, the whole net neutrality ecosystem can collapse. Earlier, the nation fought a war for colonisation. Here, they can colonise the Indian mindset by pushing their content,” he added. 

Laghu Udyog Bharati convenor Virendra Nagpal said the Competition Commission of India (CCI) and the Telecom Regulatory Authority of India (TRAI) needs to be watchful because there are “several grey areas in this deal where violations can take place”.

CAIT general secretary Praveen Khandelwal added that the biggest concern about the deal was the possible “misuse of personal data”. 

“How will they protect data of Indians stored with WhatsApp and Facebook? The Data Protection Bill states data should not be used for commercial purposes and no third party will use this data… Who will take this guarantee?” he said. “We have requested Commerce Minister Piyush Goyal to look into this deal with precision so they can’t violate FDI laws.”

It was because of concerns surrounding net neutrality that the TRAI had barred the launch of Facebook’s free basics programme in India in 2016. Brought in under a tie-up with Anil Ambani’s Reliance Communication, the programme sought to assure free internet for basic services. However, it was withdrawn after massive protests. 

Concerns about payment banks 

Mahajan said another area where the deal may cause deep disruption is the digital payments segment, with the AliBaba-backed PayTM and Walmart’s PhonePe facing a funds crunch. WhatsApp’s payments feature was rolled out in India earlier this year. 

Khandelwal described as “optics” Jio’s promise that the deal would be leveraged to help mom-and-pop grocery stores by connecting them with potential customers in their area.

This, he said, was done to avoid criticism from the swadeshi lobby. “In the long run, we have to see whether they do the same things as Amazon and Flipkart, that is, predatory pricing, violation of FDI rules, and destroying retail traders,” said Khandelwal.


Also Read: Mukesh Ambani is back as Asia’s richest man after Jio’s deal with Facebook


 

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2 COMMENTS

  1. Sir – Investment is for minority stake not merger. Data with respective groups is dear to them. They won’t share with each other. Question does not arise. Net Neutrality & Data Protection laws are strong. No question of any misuse or violation. Only vested interests, have started misinformation campaigns against this investment by alleging that the deal would allow sharing of subscriber data and violate net-neutrality. A reputed US based tech company, investing in another highly reputed Indian company, both committing to uplift millions of small shop owners while abiding by the Indian laws, deserve your support.

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