The Competition Commission of India (CCI) has warned that the potential merger between Reliance and Disney could harm competition. This is as per a report by Reuters.
The report emphasises that the $8.5 billion merger could negatively impact competition because of the companies' control over cricket broadcasting rights. The commission has reportedly asked both companies why an investigation should not be ordered in them.
Mukesh Ambani's Reliance is expected to hold the majority control in the merged entity, securing valuable rights worth billions for broadcasting cricket on TV and streaming platforms. This has sparked concerns about its potential pricing influence and dominance over advertisers.
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Once the merger happens, this will be India’s biggest entertainment player. It will compete with other companies such as Zee Entertainment, Sony and Netflix. Antitrust experts have reportedly warned that this deal could face intense scrutiny due to its potential market dominance. Speaking to Reuters, a source said, “The notice means that initially the CCI thinks the merger harms competition and whatever concessions offered are not enough.”
Just to give some context, the Reliance-Disney merger was announced in February this year. In a joint statement, the companies said, “The JV will be one of the leading TV and digital streaming platforms for entertainment and sports content in India, bringing together iconic media assets across entertainment and sports.”
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Nita Ambani will lead the board of the merged entity as chairperson, with former Disney executive Uday Shankar taking on the role of vice chair. The companies also highlighted that they would offer domestic and global entertainment content and sports at an affordable price.
Around 100 questions related to the merger have already been asked by the CCI to both Reliance and Disney. Meanwhile, the report adds that the CCI has given both companies 30 days to give a response and explain their stand.
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